Alpha

English translation: active return

02:28 Jun 3, 2019

English language (monolingual) [PRO]
Bus/Financial - Economics / FX markets

English term or phrase: Alpha

Methods Of Generating Alpha

There are a variety of ways to generate alpha in the FX markets. A top team of spot traders, a
group of economists or a fully trained neural net algorithm might all work well. But the method
which has leapt to the front of the pack is the so-called 'technical-type' back-tested models.

Nam Vo KudoZ activity Questions: 824 (none open) (5 closed without grading) Answers: 20 Vietnam
Local time: 08:11

Selected answer:active return

Explanation:
Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
It is usually referred to with mutual funds.

Selected response from:

Ronald Cryer
Colombia
Local time: 20:11

Grading comment

Thank you very much :
4 KudoZ points were awarded for this answer

SUMMARY OF ALL EXPLANATIONS PROVIDED

measure of investment performance compared with a suitable market index

Yvonne Gallagher

excess returns

Juan Arturo Blackmore Zerón

active return

Ronald Cryer

Answers

10 mins confidence:

alpha

active return

The excess return of an investment relative to the active return of a benchmark index is the investment’s alpha.

https://www.investopedia.com/terms/a/alpha.asp

Ronald Cryer
Colombia
Local time: 20:11
Works in field
Native speaker of: English
PRO pts in category: 4

Grading comment

Thank you very much :

Notes to answerer

Asker: Thank you very much :)

33 mins confidence:

alpha excess returns

Explanation:

https://www.investopedia.com/terms/a/alpha_generator.asp

Juan Arturo Blackmore Zerón
Mexico
Local time: 20:11
Native speaker of: Spanish

Notes to answerer

Asker: Thank you :)

1 day 8 hrs confidence:

alpha measure of investment performance compared with a suitable market index

Explanation:
the important thing to note is that alpha investments give an excess on return AFTER fees so equals a real return

I think this explains it a bit better than investopoedia

https://en.wikipedia.org/wiki/Alpha_(finance)

"...In modern financial markets, where index funds are widely available for purchase, alpha is commonly used to judge the performance of mutual funds and similar investments. As these funds include various fees normally expressed in percent terms, the fund has to maintain an alpha greater than its fees in order to provide positive gains compared with an index fund. Historically, the vast majority of traditional funds have had negative alphas, which has led to a flight of capital to index funds and non-traditional hedge funds..."

Yvonne Gallagher
Ireland
Local time: 02:11
Works in field
Native speaker of:

English
PRO pts in category: 8

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English translation: active return

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