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- Alpha and beta are two of the key measurements used to evaluate the performance of a stock, a fund, or an investment portfolio. Alpha measures the amount that the investment has returned in comparison to the market index or other broad benchmark that it is compared against. Beta measures the relative volatility of an investment.
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What is the difference between alpha and beta?
What is alpha & beta?
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Apr 10, 2024 · Key Takeaways. Both alpha and beta are historical measures of past performances. Alpha shows how well (or badly) a stock has performed in comparison to a benchmark index. Beta indicates how...
Apr 18, 2024 · Key Points. Understanding the alpha and beta concepts is important for maximizing portfolio performance. Higher alpha is always preferred to lower alpha, but there are scenarios where...
- Lee Samaha
Apr 18, 2024 · Though both greek letters, alpha and beta are quite different from each other. Alpha is a way to measure excess return, while beta is used to measure the volatility, or risk, of an asset.
Aug 21, 2023 · Differences Between Alpha and Beta. 'Smart Beta' Bottom Line. Alpha and beta are measures used by investors to classify the performance and risk of an investment security or...
- Kent Thune
Apr 19, 2023 · Kaitlyn Koterbski. Wed, Apr 19, 2023, 7:13 AM 7 min read. In this article: ^GSPC. Alpha and beta are two statistical measurements used in modern portfolio theory (MPT) to help investors determine...
Alpha is a way to measure excess return, while beta is used to measure the volatility, or risk, of an asset. Beta might also be referred to as the return you can earn by passively owning the market. Bottom line. While alpha and beta might sound like complex and intimidating financial terms, they’re really just ways to measure risk and return.
