Alpha

Alpha

Measures the difference between a fund's actual returns and its expected performance, given its level of risk (as measured by its beta). A positive alpha figure indicates that a fund has performed better than its beta would predict. Alternatively, a negative alpha figure indicates that a fund has under-performed, given the expectations established by the fund's beta. A high alpha is generally considered to be an indication of good, active management.

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Part of Speech: noun
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Industry/Domain: Financial services
Category: Funds
Company: Merrill Lynch
Product:
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Related terms

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buy to cover

Financial services; Funds

The purchase of a long position to offset a short position.

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