Alpha
Alpha represents an investment's performance relative to a benchmark index, indicating the active return on investment compared to the market.
Alpha, information-ratio, Jensen's alpha, and tracking-error terms used in active-risk evaluation.
Alpha, Information Ratio, and Tracking Error terms measure portfolio return, attribution, benchmark-relative results, tracking error, and risk-adjusted performance.
Use this branch when the question depends on how performance was calculated, attributed, benchmarked, or adjusted for risk.
| Term | Use it for |
|---|---|
| Alpha | Return calculation, attribution, benchmark, capture ratio, tracking error, alpha, Sharpe, Sortino, Treynor, or risk-adjusted performance terms. |
| Alpha Generation | Return calculation, attribution, benchmark, capture ratio, tracking error, alpha, Sharpe, Sortino, Treynor, or risk-adjusted performance terms. |
| Information Ratio (IR) | Return calculation, attribution, benchmark, capture ratio, tracking error, alpha, Sharpe, Sortino, Treynor, or risk-adjusted performance terms. |
| Jensen’s Alpha | Return calculation, attribution, benchmark, capture ratio, tracking error, alpha, Sharpe, Sortino, Treynor, or risk-adjusted performance terms. |
| Tracking Error | Return calculation, attribution, benchmark, capture ratio, tracking error, alpha, Sharpe, Sortino, Treynor, or risk-adjusted performance terms. |
Check the return formula, cash-flow timing, benchmark, fee treatment, reference rate or hurdle rate input, volatility period, attribution model, currency, and whether performance is gross, net, historical, or hypothetical.
This page is educational and does not recommend a specific portfolio, security, fund, tax treatment, or account choice.
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Alpha represents an investment's performance relative to a benchmark index, indicating the active return on investment compared to the market.
Alpha generation refers to the ability to achieve investment returns exceeding a market index's benchmark return, adjusted for risk.
The information ratio measures active return per unit of tracking error to evaluate benchmark-relative manager skill.
Jensen's Alpha is a metric that evaluates a portfolio's return above the expected return predicted by the Capital Asset Pricing Model (CAPM).
Tracking error measures the volatility of active return between a portfolio and its benchmark.