Cryptocurrency Q&A
How do I calculate alpha?
How do I calculate alpha?
Dario
Tue Oct 15 2024
|
7 answers
1700
I'm trying to figure out how to calculate alpha, but I'm not sure where to start. I've heard it's related to statistics and maybe finance, but I need a clear explanation on how to do it.
7 answers
Elena
Thu Oct 17 2024
Calculating alpha is a crucial aspect of assessing the performance of an investment portfolio. The formula for alpha is designed to measure the excess return of a portfolio over and above what would be expected given its level of risk.
Was this helpful?
315
77
Dario
Wed Oct 16 2024
By subtracting the risk-free rate and adjusting for the portfolio's systematic risk relative to the market, the alpha calculation reveals the portfolio's ability to generate returns above and beyond what would be expected based solely on its risk profile.
Was this helpful?
265
86
BusanBeautyBlooming
Wed Oct 16 2024
The formula for alpha is straightforward: Alpha = R - Rf - beta (Rm - Rf). Here, 'R' stands for the actual return of the portfolio over a specific period.
Was this helpful?
182
24
BlockchainVisionary
Wed Oct 16 2024
'Rf' represents the risk-free rate of return, which is typically the interest rate on a short-term government bond. This rate serves as a benchmark for the minimum return investors expect without taking on any risk.
Was this helpful?
105
91
henry_harrison_philosopher
Wed Oct 16 2024
A positive alpha indicates that the portfolio has outperformed its benchmark, taking into account its risk level. Conversely, a negative alpha suggests that the portfolio has underperformed its benchmark.
Was this helpful?
340
48
Load 5 more related questions
Related questions
- How do I press alpha on my laptop?
- Is BTC haram or halal?｜Among the major cryptocurrencies, Bitcoin, Ethereum, and Dogecoin come under the halal category, while Shiba Inu (SHIB) token, Alpha, and PancakeSwap (CAKE) are labelled haram. To use CryptoHalal, a user must enter the name of the cryptocurrency.
- How much is Alpha vs USD?
