Risk glossary



Also known as the Jensen Index. A measure of the difference between a fund’s actual returns and its expected returns given its risk level or benchmark, as measured by its beta. The alpha is a measure of risk-adjusted performance. An alpha is usually generated by regressing the security, portfolio or mutual fund’s excess return relative to a benchmark index. The beta adjusts for the systemic risk (the slope co-efficient). The alpha is the intercept.

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