Alpha

August 26th, 2017 by Kara in

A number that measures a security’s performance against that of the market, i.e., its return that cannot be explained by the movements of the market. It is derived from the capital asset pricing model, where a is the x-root of the security characteristic line. Thus a positive alpha indicates an equity outperforming the market, and a negative alpha underperformance.

« Back to Glossary Index

Comments are closed.