Alpha and Tracking
Benchmark-relative performance concepts covering active return, model-based alpha, tracking error, and information ratio.
Portfolio-performance measures comparing return with total volatility, downside deviation, beta, or benchmark-relative risk.
Risk-adjusted performance measures compare return with a specific definition of risk. The Risk-Adjusted Return overview explains how metric choice changes interpretation and why no single ratio is a complete portfolio score.
Use Sharpe, Sortino, and Treynor Ratios to compare total volatility, downside deviation, and systematic market risk. Use Alpha, Information Ratio, and Tracking Error for benchmark- or model-relative performance.
Every comparison should identify the return period, risk denominator, benchmark or reference rate, fee basis, and annualization method. Historical ratios do not guarantee future returns or establish suitability.
This section is for financial education and does not recommend a portfolio, manager, benchmark, or strategy.
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Benchmark-relative performance concepts covering active return, model-based alpha, tracking error, and information ratio.
Foundation for selecting and interpreting performance measures that compare return with a defined form of risk.
Risk-adjusted performance ratios that compare return with total volatility, downside deviation, or systematic market risk.