Economy5 min read
What is Alpha and How Do You Generate It?
Alpha is the excess return your strategy produces over a benchmark. Finding it is the hard part.
QuantNull TeamCFA, MBA
Alpha is what separates a good strategy from just buying the index.
If Nifty returned 12% and your strategy returned 18%, your alpha is roughly 6%.
The challenge: alpha decays over time as more people discover the same edge.
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