Beta is a calculation meant to measure astock’s volatility compared with the overall market’s volatility. If you think of risk as the possibility of stock price dipping in value, beta can help you identifyrisky stocks. The overall stock market has a beta of 1, and a stocks beta coeffici...
Beta 0.81 Alpha 0.0477 Risk 1.53 Sharpe Ratio (0.01) Expected Return (0.02) Please note that although Webster Financial alpha is a measure of relative return and represented here as a single number, it indicates the percentage above or below yourselected benchmark(i.e., Dow Jones Industrial in...
What is alpha vs. beta? Alpha and beta are both ratios that compare the performance of a stock against that of the market as a whole, but they do so in different ways. Alpha focuses on the additional return that an investment provides on top of the market’s return. Beta indicates the...
While alpha is typically thought of as positive, it can also be negative if an investment lags its benchmark. 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. ...
Some investors favor portable alpha because it allows them to maintain their asset allocations while adjusting the amount of risk to which they are exposed. It also increases the portfolio’s diversification because alpha and beta are not correlated, so a loss in one area may be canceled out by...
Beta is a way of measuring a stock’s volatility compared with the overall market’s volatility. By definition, the market as a whole has a beta of 1, and everything else is defined in relation to that: Stocks with a value greater than 1are more volatile than the market, meaning they...
Stock A's beta is 1.5 and Stock B's beta is 0.5. What must be true, assuming the CAPM is correct?Capital Asset Pricing Model (CAPM):The capital asset pricing model (CAPM) is a model that is used to price stocks that carry a risk with them. ...
Alpha Beta is currently at 2.43. Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of an equity instrume
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...
What's the Difference Between Alpha and Beta? Alpha and beta are two different financial performance metrics for asset returns and prices, respectively. Alpha is used to describe whether and how well an asset or other financial security can outperform the market. Beta, on the other hand, indica...