Alpha is the risk-adjusted return on an investment. It is excess return of a stock portfolio or fund over a given benchmark and hence is usually used to measure the performance of fund manager in managing the fund portfolio. So usually an investor’s strategy should be to buy securities with positive alpha as these may be undervalued.
Beta of stock portfolio
Beta is a measure of a volatility of a stock and expresses the relation of movement of stock with the movement of market as a whole. The S & P 500 Index is assigned a Beta of 1. So a stock can have positive or negative value of beta.
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