Alpha

Alpha is the part of a portfolio's return that its exposure to the market does not explain. If beta says how much a portfolio should have risen given what the index did, alpha is how much it rose above or below that expectation. It is the standard measure of whether active management adds anything, and also the easiest to confuse with luck: over short periods, positive alpha is rarely distinguishable from chance.

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Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.