Alpha and Beta: How Do They Relate to Investment Risk?

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Alpha is a measurement of a portfolio manager's performance in relation to the overall market. Beta gauges the volatility of a security versus a related benchmark. Pre-Alpha is the version before the Alpha version, Alpha is the version before the Beta version, Beta is the version before the Gamma version, Release Candidate is the version just before the release. It's basically just to denote "this version is not supposed to be completely satisfactory and may contain heavy bugs or may even be completely broken".


Answer: One model used for measuring risk is the Capital Asset Pricing Model or CAPM. In the CAPM, the risk that a security contributes to a diversified portfolio is measured by its beta (or), and the expected excess return of the security is proportional to beta.

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What Does Beta Mean?

How the discovery phase works How the beta phase works How the live phase works Retiring your service. Why do some financial assets tend to earn higher returns than others?

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Navigation Hauptseite Themenportale Zufälliger Artikel. An alpha over zero means the investment has earned a return that has more than compensated for the volatility risk taken.

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