Alpha Definition
Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index. It's used to describe how much excess return an investment produces for its volatility.
The formula is the same for funds and portfolios.
How we Calculate Alpha
The formula we use to calculate Alpha is:
We use treasury bills for our risk free rate. To learn more, please click here.
Read More about Beta here.
For further reading, Investopedia is a great resource with video explainers. The page on Alpha can be found here.