Which alpha indicates the asset has outperformed the market?

Positive alpha indicates that the investment has outperformed the market , while negative alpha indicates underperformance. Positive alpha suggests that the investment has provided returns higher than expected given its risk level, while negative alpha suggests the opposite.

Why are high alpha stocks desirable investments for active portfolio managers?

In general, a higher alpha is more desirable for investors since it means greater return on investment . A lower alpha indicates the fund earned below the average expected for its risk level.

What does alpha tell you in investing?

Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market's movement as a whole . The excess return of an investment relative to the return of a benchmark index is the investment's alpha.

Is negative alpha good or bad?

Alpha measures the difference between expected and actual returns of a mutual fund, based on its beta. A positive alpha, no matter how small, is considered good. A negative alpha is considered bad or slightly below average, depending on how negative the number is .

What is the difference between alpha and Jensen alpha?

In finance, Jensen's alpha (or Jensen's Performance Index, ex-post alpha) is used to determine the abnormal return of a security or portfolio of securities over the theoretical expected return . It is a version of the standard alpha based on a theoretical performance instead of a market index.

What is the alpha beta trend indicator?

The Alpha-Beta Trend Channel study uses the standard deviation of price variation to establish two trend lines, one above and one below the moving average of a price field . This creates a channel (band) where the great majority of price field values will occur.

What do positive alpha values result in?

A positive alpha indicates the portfolio manager performed better than was expected based on the risk the manager took with the fund as measured by the fund's beta . A negative alpha means that the manager actually did worse than they should have given the required return of the portfolio.

What are alpha indicators?

Alpha is one of the five major risk management indicators for mutual funds, stocks, and bonds . In a sense, it tells investors whether an asset has consistently performed better or worse than its beta predicts. Alpha is also a measure of risk. An alpha of -15 means the investment was far too risky given the return.

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Our proprietary alpha investment model outperforms most stock market indices such as S&P 500, Dow Jones, and Nasdaq. - Blog - AYA fintech network platform provides proprietary alpha stock signals and personal finance tools for stock market investors. (2024)

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