How to use alpha and beta for your own investment portfolio If you actively invest in mutual funds or stocks, understanding alpha values can help you gauge their performance. For stock investors, beta values can help you better gauge risk levels and structure your investment portfolio appropriately...
In other words, beta tells you how risky an investment is. The market index as a whole has a beta of 1. So an asset with a beta of more than 1 is considered to be more volatile than that index, while an asset with a beta of less than 1 is less volatile. And an asset with ...
所属专辑:功不唐捐财商课(双语) 声音简介 Radical investors need to increase their positions at low points andincrease the allocation of high volatility, which will help you to makeindependent market alpha performance. On the contrary, conservative investorsshould reduce the beta value of your portfoli...
Alpha is one of five popular technical investmentrisk ratios. The others are beta,standard deviation,R-squared, and theSharpe ratio. These are all statistical measurements used inmodern portfolio theory (MPT). All of these indicators are intended to help investors determine the risk-return profile ...
Alpha is the excess return on an investment after adjusting for market-related volatility and random fluctuations. Alpha and beta are both measures used to compare and predict returns. The Equation If equations make your eyes glaze over, you can skip this part. Meanwhile, we can go straight to...
investment strategiesSummary This chapter discusses how many investment firms focus on devising strategies they believe will enhance market share. Today, this is done by adapting investment theory to serve marketing needs, turning theoretical constructs such as alpha and beta into tools of persuasion. ...
Alpha and beta You will often hear of an investment strategy or manager’s ability (or at least aim) to deliver “alpha”. This is a measure of performance which describes delivering returns in excess of broad market rises over a certain period or “beating the market”. Alpha will be ...
betainvestmentstrategymarketbenchmarkThe terms alpha and beta are derived from a regression equation whereby beta measures the sensitivity of a security or portfolio's return to the return of the market, a market index, or a set of risk factors, and alpha measures the portion of the return ...
Beta is a measure of risk. It represents how a security has responded in the past to movements of the securities market. Smart beta represents an alternative investment methodology to typical cap-weighted benchmark investing, and there is no guarantee that a smart beta or factor-based investing...
Alpha vs. beta: What’s the difference? Alpha and beta are two Greek letters that get used a lot in investing, but their meanings can be misunderstood. Alphais generally used to measure how much an investment outperformed its benchmark. Fund managers conduct deep research on companies and oth...