| Alpha Figure is a numerical expression of the excess return generated by an investment or portfolio relative to its benchmark index, after adjusting for market risk (Beta). A positive Alpha Figure—such as +2—indicates that the investment has outperformed its benchmark by 2 percentage points on a risk-adjusted basis, reflecting genuine value added by active management. Conversely, a negative Alpha suggests underperformance. Alpha is a central concept in performance attribution and is widely used by investors and allocators to distinguish skill from luck in fund management. |
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