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Alpha (finance) Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index. An alpha of 1% means the investment's return on investment over a selected period of time was 1% better than the market during that same period; a negative alpha means the investment underperformed ...
The company divides its investments into two basic categories: (1) Beta investments, whose returns are generated through passive management and standard market risk, and (2) Alpha investments, whose goal is to generate higher returns that are uncorrelated to the general market and are actively managed. The principle of separating alpha and beta ...
Alpha and beta are two terms that get thrown around a lot in investing. ... This means that a $1,000 investment in the S&P 500 at the beginning of 1965 would have been worth about $308,000 at the ...
The 5% Value at Risk of a hypothetical profit-and-loss probability density function. Value at risk (VaR) is a measure of the risk of loss of investment/Capital. It estimates how much a set of investments might lose (with a given probability), given normal market conditions, in a set time period such as a day. VaR is typically used by firms and ...
6.1 Investment aims and benchmarking. 6.2 Active or passive management. 6.3 Alpha, Beta, ... Alpha represents the fund's return when the benchmark's return is 0.
In finance, Jensen's alpha[1] (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. The security could be any asset, such as stocks ...
Beta (finance) In finance, the beta (β or market beta or beta coefficient) is a statistic that measures the expected increase or decrease of an individual stock price in proportion to movements of the stock market as a whole. Beta can be used to indicate the contribution of an individual asset to the market risk of a portfolio when it is added ...
Seth Andrew Klarman (born May 21, 1957) [1][2] is an American billionaire investor, hedge fund manager, and author. He is a proponent of value investing. He is the chief executive and portfolio manager of the Baupost Group, a Boston -based private investment partnership he founded in 1982. He closely follows the investment philosophy of ...