alpha

what is alpha

What Does Alpha Mean?

Different people will have different thought or understanding about Alpha, based on their knowledge and references.
Some may think it is Alpha Romeo – a famous brand for sport car, some may refer to mathematical formula, and so forth.

Here are what some resources think about Alpha:

Alpha as explained by investopedia.com

1. A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha.

2. The abnormal rate of return on a security or portfolio in excess of what would be predicted by an equilibrium model like the capital asset pricing model (CAPM).

Alpha as explained by Investopedia.com

1. Alpha is one of five technical risk ratios; the others are beta, standard deviation, R-squared, and the Sharpe ratio. These are all statistical measurements used in modern portfolio theory (MPT). All of these indicators are intended to help investors determine the risk-reward profile of a mutual fund. Simply stated, alpha is often considered to represent the value that a portfolio manager adds to or subtracts from a fund’s return.

A positive alpha of 1.0 means the fund has outperformed its benchmark index by 1%. Correspondingly, a similar negative alpha would indicate an underperformance of 1%.

2. If a CAPM analysis estimates that a portfolio should earn 10% based on the risk of the portfolio but the portfolio actually earns 15%, the portfolio’s alpha would be 5%. This 5% is the excess return over what was predicted in the CAPM model.
Read more at investopedia.com/terms/a/alpha.asp

Alpha in Math and Science as explained by Wikipedia

The letter alpha represents various concepts in physics and chemistry, including alpha radiation, angular acceleration, alpha particles and alpha carbon. Alpha also stands for thermal expansion coefficient of a compound in physical chemistry. It is also commonly used in mathematics in algebraic solutions representing quantities such as angles. Furthermore, in mathematics, the letter alpha is used to denote the area underneath a normal curve in statistics to denote significance level[3] when proving null and alternative hypotheses. In zoology, is used to name the dominant individual in a wolf or dog pack.

The uppercase letter alpha is not generally used as a symbol because it tends to be rendered identically to the uppercase Latin A.

Alpha and Omega in Theology as explained by Wikipedia

Alpha, both as a symbol and term, is used to refer to or describe a variety of things, including the first or most significant occurrence of something. The New Testament has God declaring himself to be the “Alpha and Omega, the beginning and the end, the first and the last.” (Revelation 22:13, KJV, and see also 1:8).

Alpha and Omega in Chinese Astrology as explained by xtraastrology.com

Yin and Yang – The alpha and omega of the cosmos

The yin and yang represent all the balancing forces in the universe. It is the alpha and omega of the cosmos. The beginning and the end of all things. Under yang are the absolute principles of creation and the forces that bring growth and evolution. Under yin are the opposing principles of counteracting forces that bring about death and anti-evolution.

The cyclical nature of yin and yang

This cyclical nature of yin and yang, the opposing forces of change in the universe, mean several things.
Read more at xtraastrology.com

Alpha is what you pronounce or sound for “A”

In a conversation or radio communication, to avoid a mistake in spelling, people pronounce Alpha for “A”, Bravo for “B”, Charlie for “C”, and so forth.

Here is the Phonetic alphabet table.

Letter Phonetic Letter Letter Phonetic Letter

A

B

C

D

E

F

G

H

I

J

K

L

M

Alpha

Bravo

Charlie

Delta

Echo

Foxtrot

Golf

Hotel

India

Juliet

Kilo

Lima

Mike

N

O

P

Q

R

S

T

U

V

W

X

Y

Z

November

Oscar

Papa

Quebec

Romeo

Sierra

Tango

Uniform

Victor

Whiskey

X-ray

Yankee

Zulu

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