Common Alpha Terminology

• Active alpha: The alpha generated by actively managing a portfolio, as opposed to passive alpha, which is generated by simply replicating a benchmark.
• Alpha capture rate: The percentage of alpha that is captured by a portfolio or strategy.
• Alpha capture rate: The proportion of alpha captured by a portfolio or strategy compared to the total available alpha in the market.
• Alpha capture ratio: A measure of the proportion of alpha captured by a portfolio or strategy compared to its benchmark.
• Alpha capture: The process of identifying and isolating the alpha component of a portfolio or strategy’s returns.
• Alpha capture: The process of measuring and recording the alpha generated by a portfolio or strategy in order to evaluate its performance and identify sources of outperformance or underperformance.
• Alpha capture: The process of measuring and recording the alpha generated by an investment or portfolio. This can be done through various methods such as regression analysis or performance attribution.
• Alpha capture: The process of measuring and reporting the alpha of a portfolio or investment strategy.
• Alpha decay: The decline in alpha over time, typically as a result of the strategy becoming more widely known and replicated by other investors.
• Alpha decay: The decline in the alpha generated by a portfolio or strategy over time due to changing market conditions or competition.
• Alpha decay: The decline in the alpha of an investment or portfolio over time, due to market conditions or other factors.
• Alpha decay: The gradual decline in the alpha of an investment over time. This can occur due to changes in market conditions, increased competition, or a loss of proprietary information or advantage.
• Alpha decay: The gradual decline in the level of alpha generated by a portfolio or strategy over time.
• Alpha decay: The gradual reduction in the level of alpha generated by a portfolio or strategy over time, often due to increased competition or changes in market conditions.
• Alpha erosion: The decline in alpha over time, typically as a result of market conditions or changes in the underlying factors that generate alpha.
• Alpha factor aggregation: The process of combining multiple alpha factors into a single measure.
• Alpha factor alerting: The process of being notified when there are significant changes in the exposure to alpha factors of an investment or strategy.
• Alpha factor analysis: The process of analyzing an investment or strategy’s exposure to one or more alpha factors in order to understand its potential for generating positive alpha.
• Alpha factor arbitrage: The process of exploiting pricing differences between similar investments or strategies by buying low and selling high.
• Alpha factor attribution: The process of attributing an investment or strategy’s positive alpha to one or more of its alpha factors in order to understand and exploit them for generating positive alpha.
• Alpha factor attribution: The process of identifying the sources of alpha, such as specific securities, sectors, or factors that contributed to the outperformance of an investment or strategy.
• Alpha factor backtesting: The process of evaluating an alpha factor model by applying it to historical data and comparing the predicted or estimated alpha factors to the actual alpha factors.
• Alpha factor backtesting: The process of simulating an investment or strategy’s exposure to one or more alpha factors over a historical time period to evaluate its potential performance.
• Alpha factor benchmarking: The process of comparing an investment or strategy’s exposure to one or more alpha factors against a benchmark or reference portfolio.
• Alpha factor benchmarking: The process of comparing an investment or strategy’s exposure to one or more alpha factors to a benchmark in order to understand its potential for generating positive alpha.
• Alpha factor benchmarking: The process of comparing an investment or strategy’s performance to a benchmark that represents a certain alpha factor or set of alpha factors.
• Alpha factor benchmarking: The process of comparing the exposure to alpha factors of an investment or strategy to that of a benchmark or peer group.
• Alpha factor blending: The process of combining exposure to multiple alpha factors in order to generate higher returns or lower risk.
• Alpha factor blending: The process of combining multiple alpha factors or strategies in order to increase the potential for generating positive alpha.
• Alpha factor blending: The process of combining multiple alpha factors to create a new, composite alpha factor.
• Alpha factor blending: The process of combining multiple alpha-generating investments or strategies to achieve a desired level of risk and return.
• Alpha factor capacity: The process of assessing the maximum amount of capital that can be invested in an investment or strategy that has exposure to alpha factors, such as by taking into account market liquidity, volatility, and other factors that may limit the size of the position.
• Alpha factor combination: The process of combining multiple alpha factors or strategies in order to increase the potential for generating positive alpha.
• Alpha factor concentration adjustment: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to mitigate the risk of negative returns due to its focus on a single asset, industry, or region.
• Alpha factor concentration management: The process of monitoring and controlling the risk of negative returns due to an investment or strategy’s focus on a single asset, industry, or region.
• Alpha factor concentration mitigation: The process of taking steps to reduce the risk of negative returns due to an investment or strategy’s focus on a single asset, industry, or region.
• Alpha factor concentration optimization: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to maximize returns while minimizing the risk of negative returns due to its focus on a single asset, industry, or region.
• Alpha factor concentration reporting: The process of providing information on the risk of negative returns due to an investment or strategy’s focus on a single asset, industry, or region.
• Alpha factor concentration risk: The potential for an investment or strategy’s exposure to one or more alpha factors to generate negative returns due to its focus on a single asset, industry, or region.
• Alpha factor concentration tracking: The process of monitoring the risk of negative returns due to an investment or strategy’s focus on a single asset, industry, or region.
• Alpha factor concentration: The degree to which an investment or strategy is exposed to a single alpha factor.
• Alpha factor concentration: The degree to which an investment or strategy’s exposure to one or more alpha factors is focused in a single asset, industry, or region.
• Alpha factor concentration: The process of focusing investments or strategies that have exposure to alpha factors on a specific sector, industry, or geographic region to potentially increase the overall return.
• Alpha factor concentration: The process of having a high level of exposure to a specific alpha factor in an investment or strategy, which can increase risk and volatility.
• Alpha factor constraint: A restriction or limitation on an investment or strategy’s exposure to certain alpha factors, which can impact its performance.
• Alpha factor correlation: The degree to which an investment or strategy’s exposure to one or more alpha factors is related to the performance of other investments or strategies.
• Alpha factor correlation: The process of measuring the degree to which an alpha-generating investment or strategy is correlated to other investments or strategies.
• Alpha factor correlation: The relationship between the returns of different alpha factors.
• Alpha factor covariance: The degree to which returns of different alpha factors vary together.
• Alpha factor data: The information used to measure and analyze alpha factors.
• Alpha factor decay adjustment: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to mitigate the rate at which it declines in value over time.
• Alpha factor decay management: The process of monitoring and controlling the rate at which an investment or strategy’s exposure to one or more alpha factors declines in value over time.
• Alpha factor decay mitigation: The process of taking steps to reduce the rate at which an investment or strategy’s exposure to one or more alpha factors declines in value over time.
• Alpha factor decay optimization: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to maximize returns while minimizing the rate at which it declines in value over time.
• Alpha factor decay rate: The rate at which the value of an investment or strategy’s exposure to one or more alpha factors declines over time.
• Alpha factor decay reporting: The process of providing information on the rate at which an investment or strategy’s exposure to one or more alpha factors declines in value over time.
• Alpha factor decay risk: The potential for an investment or strategy’s exposure to one or more alpha factors to decline in value over time, due to market conditions or other factors.
• Alpha factor decay tracking: The process of monitoring the rate at which an investment or strategy’s exposure to one or more alpha factors declines in value over time.
• Alpha factor decay: The process of the gradual decline of alpha over time due to market conditions, economic indicators, or other factors.
• Alpha factor decay: The rate at which an investment or strategy’s exposure to one or more alpha factors loses value over time, due to market conditions or other factors.
• Alpha factor decomposition: The process of breaking down an investment or strategy’s returns into different components, such as alpha, beta, and other factors.
• Alpha factor decomposition: The process of breaking down the return of an investment or strategy into its different components, such as exposure to alpha factors, beta factors, and other systematic and unsystematic factors.
• Alpha factor decomposition: The process of breaking down the returns of an investment or strategy into its alpha and beta components.
• Alpha factor diversification: The degree to which an investment or strategy has exposure to multiple alpha factors in order to reduce the risk of negative alpha.
• Alpha factor diversification: The process of spreading an investment or strategy’s exposure across multiple alpha factors to reduce risk and increase return potential.
• Alpha factor diversification: The process of spreading an investment or strategy’s exposure to one or more alpha factors across multiple assets, industries, or regions to reduce risk.
• Alpha factor diversification: The process of spreading exposure to alpha factors across multiple investments or strategies to reduce risk and improve performance.
• Alpha factor diversification: The process of spreading exposure to different alpha factors in order to reduce risk.
• Alpha factor diversification: The process of spreading out exposure to multiple alpha factors to reduce risk.
• Alpha factor diversification: The process of spreading out investments or strategies that have exposure to alpha factors across different sectors, industries, or geographic regions to reduce the overall risk.
• Alpha factor enhancement: The process of improving an investment or strategy’s exposure to alpha factors.
• Alpha factor enhancement: The process of improving an investment or strategy’s exposure to one or more alpha factors in order to increase its potential for generating positive alpha.
• Alpha factor enhancement: The process of improving the performance of an investment or strategy by adding or adjusting alpha factors.
• Alpha factor enhancement: The process of increasing the exposure to alpha factors of an investment or strategy through the use of derivatives or other financial instruments.
• Alpha factor evaluation: The process of evaluating an investment or strategy’s exposure to one or more alpha factors in order to understand its potential for generating positive alpha.
• Alpha factor exposure: The degree to which an investment or strategy has a high or low level of exposure to a particular alpha factor.
• Alpha factor exposure: The degree to which an investment or strategy is exposed to a certain alpha factor or set of alpha factors.
• Alpha factor exposure: The degree to which an investment or strategy is exposed to certain alpha factors, which can impact its performance.
• Alpha factor exposure: The degree to which an investment or strategy is exposed to one or more alpha factors.
• Alpha factor exposure: The exposure of a portfolio or strategy to the alpha factors that are expected to generate alpha.
• Alpha factor exposure: The level of exposure of a portfolio or strategy to a particular alpha factor.
• Alpha factor exposure: The process of measuring the degree to which an investment or strategy is exposed to alpha factors, such as by using factor models or other quantitative methods.
• Alpha factor extraction: The process of extracting an investment or strategy’s alpha factors in order to understand and exploit them for generating positive alpha.
• Alpha factor filtering: The process of removing investments or strategies from consideration based on their exposure to one or more alpha factors in order to identify those with the most potential for generating positive alpha.
• Alpha factor forward testing: The process of evaluating an alpha factor model by applying it to current or future data and comparing the predicted or estimated alpha factors to the actual alpha factors.
• Alpha factor governance: The process of overseeing and governing an investment or strategy’s exposure to one or more alpha factors in order to ensure positive alpha generation.
• Alpha factor harvesting: The process of capturing alpha by taking advantage of short-term market inefficiencies or anomalies.
• Alpha factor harvesting: The process of capturing alpha from multiple sources, such as different investment strategies or asset classes, in order to increase returns.
• Alpha factor harvesting: The process of extracting positive alpha from an investment or strategy by identifying and exploiting its alpha factors.
• Alpha factor harvesting: The process of extracting the exposure to alpha factors from an investment or strategy through the use of derivatives or other financial instruments.
• Alpha factor hedging: The process of using financial instruments or strategies to offset the risk of an investment or strategy’s exposure to certain alpha factors.
• Alpha factor identification: The process of identifying an investment or strategy’s alpha factors in order to understand and exploit them for generating positive alpha.
• Alpha factor implementation efficiency: The degree to which an investment or strategy’s actual exposure to alpha factors matches its intended exposure.
• Alpha factor implementation gap: The difference between the expected exposure to alpha factors of an investment or strategy and its actual exposure.
• Alpha factor implementation shortfall: The difference between the expected returns of an investment or strategy based on its exposure to alpha factors and its actual returns.
• Alpha factor implementation: The process of implementing an investment or strategy’s exposure to one or more alpha factors in order to generate positive alpha.
• Alpha factor independence: The degree to which returns of different alpha factors are not related.
• Alpha factor isolation: The process of identifying and isolating an investment or strategy’s alpha factors in order to understand and exploit them for generating positive alpha.
• Alpha factor liquidity: The ease with which positions in an investment or strategy can be bought or sold in order to adjust exposure to alpha factors.
• Alpha factor liquidity: The process of assessing and managing the liquidity of securities or strategies that have exposure to alpha factors, such as by avoiding illiquid securities or strategies that may be difficult to buy or sell in a timely manner.
• Alpha factor loading: The degree to which a security or portfolio is exposed to a certain alpha factor or set of alpha factors, usually measured by its regression coefficients.
• Alpha factor management: The process of managing an investment or strategy’s exposure to one or more alpha factors in order to generate positive alpha.
• Alpha factor marginal contribution: The process of measuring the additional return or risk that is contributed by a specific alpha factor to an investment or strategy.
• Alpha factor model: A mathematical or statistical model used to predict or estimate alpha factors.
• Alpha factor model: A model that uses alpha factors to explain the level of alpha generated by a portfolio or strategy.
• Alpha factor model: A model that uses one or more alpha factors to predict or explain the alpha of an investment or strategy.
• Alpha factor model: A statistical model that uses alpha factors to predict the alpha that a portfolio or strategy is likely to generate.
• Alpha factor momentum: The process of identifying and exploiting the persistence of alpha factors over time, such as by investing in securities or strategies that have recently exhibited strong alpha.
• Alpha factor momentum: The process of identifying and investing in alpha factors that have performed well in the past, based on the expectation that they will continue to perform well in the future.
• Alpha factor monitoring: The process of regularly tracking the exposure to alpha factors of an investment or strategy.
• Alpha factor neutral: A portfolio or strategy that is not exposed to any specific alpha factors, or is exposed to them in a neutral or balanced way.
• Alpha factor normalization: The process of adjusting the scale of alpha factors to make them comparable across different investments or strategies.
• Alpha factor normalization: The process of standardizing an investment or strategy’s exposure to one or more alpha factors.
• Alpha factor optimization: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to maximize its potential for generating positive alpha.
• Alpha factor optimization: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to maximize returns and/or minimize risk.
• Alpha factor optimization: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to maximize returns while minimizing risk.
• Alpha factor optimization: The process of adjusting the parameters of an alpha factor model to maximize its predictive or estimating accuracy.
• Alpha factor optimization: The process of finding the optimal combination of alpha factors for an investment or strategy based on a desired level of risk and return.
• Alpha factor optimization: The process of finding the optimal combination of alpha factors or strategies in order to maximize returns or minimize risk.
• Alpha factor orthogonality: The degree to which an investment or strategy’s alpha factors are independent or uncorrelated with each other.
• Alpha factor overlay: The process of adding exposure to alpha factors to an existing portfolio through the use of derivatives or other financial instruments.
• Alpha factor performance attribution: The process of determining the contribution of alpha factors to the overall performance of an investment or strategy.
• Alpha factor performance: The returns generated by an investment or strategy’s exposure to one or more alpha factors.
• Alpha factor portfolio: A portfolio that is constructed based on the alpha factors that are expected to generate alpha.
• Alpha factor ranking: The process of ordering investments or strategies based on their exposure to alpha factors.
• Alpha factor ranking: The process of ranking investments or strategies based on their exposure to one or more alpha factors in order to identify those with the most potential for generating positive alpha.
• Alpha factor replication benchmark: A benchmark used to compare the returns of an investment or strategy that is believed to be generated by exposure to one or more alpha factors to the returns of a replication of that investment or strategy.
• Alpha factor replication benchmark: A benchmark used to measure the performance of a replicated alpha factor portfolio against the original alpha factor portfolio.
• Alpha factor replication benchmarking: The process of comparing the performance of the replicated portfolio to a benchmark or reference portfolio.
• Alpha factor replication cost: The cost associated with creating a replicated alpha factor portfolio, including data and research costs, transaction costs, and management fees.
• Alpha factor replication error: The difference between the returns of an investment or strategy that is believed to be generated by exposure to one or more alpha factors and the returns of a replication of that investment or strategy.
• Alpha factor replication error: The difference between the returns of the replicated portfolio and the known alpha factor.
• Alpha factor replication error: The difference in performance between a replicated alpha factor portfolio and the original alpha factor portfolio.
• Alpha factor replication execution: The process of implementing the replication strategy and creating the replicated portfolio.
• Alpha factor replication factor: A factor that reflects the degree of similarity between a replicated alpha factor portfolio and the original alpha factor portfolio.
• Alpha factor replication index: A index that aims to replicate the performance of a specific alpha factor or set of alpha factors by selecting and weighting securities based on certain criteria or factors.
• Alpha factor replication index: An index that tracks the returns of an investment or strategy that is believed to be generated by exposure to one or more alpha factors, used as a benchmark for replicating that investment or strategy.
• Alpha factor replication optimization: The process of adjusting the replicated portfolio to minimize replication error and/or replication risk.
• Alpha factor replication portfolio: A portfolio that is constructed to replicate the returns of an investment or strategy that is believed to be generated by exposure to one or more alpha factors.
• Alpha factor replication reporting: The process of providing information on the performance of the replicated portfolio relative to the known alpha factor.
• Alpha factor replication research: The process of researching and analyzing the characteristics of known alpha factors to identify potential opportunities and risks for replication.
• Alpha factor replication risk: The potential for a replicated alpha factor portfolio to perform differently than the original alpha factor portfolio due to various factors such as data errors, estimation errors, and market conditions.
• Alpha factor replication risk: The potential for the replicated portfolio to deviate from the known alpha factor due to errors in the replication process.
• Alpha factor replication strategy: A strategy that seeks to replicate the performance of a specific alpha factor or set of alpha factors using various investment techniques such as index construction, factor tilting, and portfolio replication.
• Alpha factor replication strategy: The plan or approach used to replicate the returns of a known alpha factor.
• Alpha factor replication tracking error: The difference in performance between a replicated alpha factor portfolio and the original alpha factor portfolio over a specific time period.
• Alpha factor replication tracking: The process of monitoring the performance of the replicated portfolio relative to the known alpha factor.
• Alpha factor replication: The process of creating an investment or strategy that mimics the performance of a specific alpha factor or set of alpha factors.
• Alpha factor replication: The process of replicating the return and risk characteristics of an alpha-generating investment or strategy by using a combination of other investments or strategies.
• Alpha factor replication: The process of replicating the returns of a known alpha factor by constructing a portfolio of assets that have similar characteristics.
• Alpha factor replication: The process of reproducing an investment or strategy’s alpha factors in order to replicate its potential for generating positive alpha.
• Alpha factor replication: The process of reproducing the exposure to alpha factors of an investment or strategy through the use of derivatives or other financial instruments.
• Alpha factor replication: The process of reproducing the returns of an investment or strategy that is believed to be generated by exposure to one or more alpha factors.
• Alpha factor reporting: The process of providing information on the exposure to alpha factors of an investment or strategy in a clear and concise format.
• Alpha factor research: The process of researching an investment or strategy’s exposure to one or more alpha factors in order to understand its potential for generating positive alpha.
• Alpha factor research: The process of researching and analyzing alpha factors to identify potential opportunities and risks.
• Alpha factor return attribution: The process of determining the contribution of alpha factors to the overall return of an investment or strategy.
• Alpha factor return: The potential for an investment or strategy’s exposure to one or more alpha factors to generate positive returns.
• Alpha factor risk attribution: The process of determining the contribution of alpha factors to the overall risk of an investment or strategy.
• Alpha factor risk attribution: The process of identifying the specific alpha factors that have contributed to an investment or strategy’s overall risk and return.
• Alpha factor risk budgeting: The process of allocating risk budget to different alpha factors based on their expected return and risk characteristics.
• Alpha factor risk factor: A specific factor or set of factors that have been identified as potentially impacting the risk of an investment or strategy.
• Alpha factor risk management: The process of identifying and mitigating risks associated with exposure to alpha factors.
• Alpha factor risk management: The process of identifying, measuring, and mitigating the risk associated with an investment or strategy’s exposure to certain alpha factors.
• Alpha factor risk model: A model used to measure the risk associated with an investment or strategy’s exposure to certain alpha factors.
• Alpha factor risk premium: The excess return of a portfolio that is exposed to a certain alpha factor over the return of a benchmark portfolio.
• Alpha factor risk: The potential for an investment or strategy’s exposure to one or more alpha factors to generate negative returns.
• Alpha factor risk: The potential for an investment or strategy’s performance to be impacted by certain alpha factors, either positively or negatively.
• Alpha factor risk: The process of measuring and managing the risk associated with exposure to alpha factors, such as by using risk management techniques such as diversification, hedging, or value-at-risk (VaR) calculations.
• Alpha factor risk: The risk of a portfolio or strategy associated with a particular alpha factor.
• Alpha factor risk-adjusted return: A measure of an investment or strategy’s return relative to its risk, taking into account its exposure to one or more alpha factors.
• Alpha factor rotation: The process of regularly switching investments or strategies that have exposure to alpha factors based on market conditions, economic indicators, or other factors.
• Alpha factor rotation: The process of switching between different alpha factors or strategies in order to capture the best returns or avoid the worst performance.
• Alpha factor scaling: The process of adjusting the magnitude of an investment or strategy’s exposure to one or more alpha factors.
• Alpha factor scoring: The process of assigning a numerical value to investments or strategies based on their exposure to alpha factors.
• Alpha factor screening: The process of filtering a universe of investments or strategies based on their exposure to alpha factors.
• Alpha factor screening: The process of identifying and selecting investments or strategies that have a high potential for alpha generation based on certain criteria or factors.
• Alpha factor screening: The process of screening investments or strategies based on their exposure to one or more alpha factors in order to identify those with the most potential for generating positive alpha.
• Alpha factor selection: The process of choosing which alpha factors to include in an investment or strategy based on their potential for generating positive alpha.
• Alpha factor selection: The process of choosing which investments or strategies to include in a portfolio based on their exposure to alpha factors.
• Alpha factor selection: The process of identifying and choosing the alpha factors to use in an investment or strategy.
• Alpha factor signal generation: The process of identifying the exposure to alpha factors of an investment or strategy through the use of quantitative or qualitative methods.
• Alpha factor signal processing: The process of analyzing and interpreting the exposure to alpha factors of an investment or strategy.
• Alpha factor signal trading: The process of using the exposure to alpha factors of an investment or strategy to make investment decisions.
• Alpha factor strategy: A strategy that is constructed based on the alpha factors that are expected to generate alpha.
• Alpha factor stress testing: The process of evaluating the performance of a portfolio or strategy under different market scenarios to assess its risk and resilience.
• Alpha factor tax efficiency: The degree to which an investment or strategy’s exposure to alpha factors results in minimal tax consequences.
• Alpha factor tax efficiency: The process of minimizing the tax impact of an investment or strategy that has exposure to alpha factors, such as by using tax-efficient investment vehicles or strategies.
• Alpha factor testing: The process of testing an investment or strategy’s exposure to one or more alpha factors in order to validate its potential for generating positive alpha.
• Alpha factor tilt: The process of adjusting the exposure of a portfolio or strategy to a certain alpha factor or set of alpha factors in order to increase returns or reduce risk.
• Alpha factor tilt: The tilt of a portfolio or strategy towards the alpha factors that are expected to generate alpha.
• Alpha factor tilting: The process of adjusting an investment or strategy’s exposure to certain alpha factors based on a prediction or expectation of their future performance.
• Alpha factor tilting: The process of adjusting an investment or strategy’s exposure to one or more alpha factors in order to increase its potential for generating positive alpha.
• Alpha factor timing: The ability to predict when a particular alpha factor will generate positive or negative returns.
• Alpha factor timing: The process of adjusting the exposure of a portfolio or strategy to a certain alpha factor or set of alpha factors based on market conditions or other factors that may impact their expected returns.
• Alpha factor timing: The process of identifying and taking advantage of short-term market inefficiencies or anomalies to capture alpha.
• Alpha factor timing: The timing of the exposure to the alpha factors in relation to the expected alpha generation.
• Alpha factor tracking: The process of monitoring an investment or strategy’s exposure to one or more alpha factors over time in order to understand its potential for generating positive alpha.
• Alpha factor turnover: The frequency at which an investment or strategy’s exposure to one or more alpha factors is adjusted or rebalanced.
• Alpha factor turnover: The process of measuring the rate at which securities or strategies are bought and sold within an investment or strategy that has exposure to alpha factors, such as by assessing the impact of high turnover on transaction costs and taxes.
• Alpha factor turnover: The rate at which positions in an investment or strategy are bought and sold in order to adjust exposure to alpha factors.
• Alpha factor validation: The process of testing an alpha factor model to ensure it accurately predicts or estimates alpha factors.
• Alpha factor value: The process of identifying and exploiting mispricings in securities or strategies that are expected to exhibit strong alpha in the future, such as by investing in securities or strategies that are undervalued based on fundamental or quantitative measures.
• Alpha factor weighting: The allocation of an investment or strategy’s exposure to one or more alpha factors.
• Alpha factor weighting: The degree to which an investment or strategy gives more or less weight to a particular alpha factor in its investment decisions.
• Alpha factor weighting: The process of assigning weights to different alpha factors in order to determine their relative importance in an investment or strategy.
• Alpha factor weighting: The process of determining how much of a portfolio should be allocated to each investment or strategy based on their exposure to alpha factors.
• Alpha factor weighting: The process of determining the relative importance of different alpha factors in an investment or strategy.
• Alpha factor weighting: The weighting of the alpha factors in a portfolio or strategy.
• Alpha factor: A factor that is believed to be associated with alpha generation.
• Alpha factor: A factor that is believed to be responsible for generating alpha in a portfolio or investment strategy. Examples include value, momentum, and quality.
• Alpha factor: A variable or characteristic that is believed to be associated with alpha generation.
• Alpha factor: A variable or characteristic that is believed to be associated with positive alpha in an investment or strategy.
• Alpha factor: A variable or characteristic that is used to explain the level of alpha generated by a portfolio or strategy, such as volatility or momentum.
• Alpha factors portfolio: A portfolio that is constructed based on the alpha factors that are expected to generate alpha.
• Alpha factors: Variables or characteristics that are believed to be associated with alpha generation.
• Alpha generating factor: A variable or characteristic that is believed to be associated with the ability to generate alpha.
• Alpha generating strategy: A strategy that aims to generate alpha through active management or security selection.
• Alpha generation capacity: The potential of a portfolio or strategy to generate alpha.
• Alpha generation rate: The rate at which a portfolio or strategy generates alpha.
• Alpha generation: The process of creating new alpha by developing and implementing new investment ideas, strategies, or technologies.
• Alpha generation: The process of creating or identifying investments or strategies that will generate positive alpha.
• Alpha generation: The process of creating value or returns in excess of a benchmark through active management or security selection.
• Alpha generation: The process of finding and selecting investments that are expected to produce a higher return than the benchmark, in order to generate a positive alpha.
• Alpha harvesting: The process of actively managing a portfolio or strategy in order to capture as much alpha as possible, often through dynamic rebalancing or tactical adjustments.
• Alpha hedge: A hedge that aims to generate a positive alpha, as opposed to a beta hedge, which aims to reduce the overall risk of a portfolio.
• Alpha hedge: A strategy or investment that is intended to generate alpha by hedging against market risks or other sources of volatility.
• Alpha hunting: The process of actively seeking out investments or strategies that have the potential to generate positive alpha.
• Alpha neutral portfolio: A portfolio that is constructed with a neutral weighting to securities or factors that are expected to generate alpha.
• Alpha neutral strategy: A strategy that is constructed with a neutral weighting to securities or factors that are expected to generate alpha.
• Alpha neutral: A portfolio or strategy that is constructed with a neutral weighting to securities or factors that are expected to generate alpha.
• Alpha replication: The process of creating a portfolio or strategy that mimics the characteristics and returns of an existing alpha-generating portfolio or strategy.
• Alpha risk: The risk that a portfolio or strategy will underperform its benchmark or expected return due to poor security selection or active management decisions.
• Alpha risk: The risk that an investment or portfolio will not generate a positive alpha.
• Alpha risk: The risk that an investment or strategy will not generate positive alpha, or will generate less alpha than expected.
• Alpha seeking: A strategy or approach that aims to generate alpha through active management or security selection.
• Alpha seeking: The strategy of actively searching for and investing in alpha-generating investments or strategies, often through quantitative or systematic methods.
• Alpha shortfall: The difference between the expected alpha for a portfolio or strategy and the actual alpha generated.
• Alpha signal model: A statistical model that uses alpha signals to predict the alpha that a portfolio or strategy is likely to generate.
• Alpha signal persistence: The degree to which an alpha signal is likely to continue to indicate that an investment or strategy has the potential to generate positive alpha over time.
• Alpha signal portfolio: A portfolio that is constructed based on the alpha signals that are expected to generate alpha.
• Alpha signal reliability: The degree to which an alpha signal is likely to accurately indicate that an investment or strategy has the potential to generate positive alpha.
• Alpha signal strategy: A strategy that is constructed based on the alpha signals that are expected to generate alpha.
• Alpha signal strength: The degree to which an alpha signal is believed to be associated with alpha generation.
• Alpha signal strength: The degree to which an alpha signal is likely to indicate that an investment or strategy has the potential to generate positive alpha.
• Alpha signal timing: The degree to which an alpha signal is likely to indicate that an investment or strategy has the potential to generate positive alpha at the most opportune time.
• Alpha signal timing: The timing of an alpha signal in relation to the expected alpha generation.
• Alpha signal: A metric or indicator that is used to identify potential alpha-generating opportunities.
• Alpha signal: A signal or indicator that is believed to be associated with alpha generation.
• Alpha signal: A signal or indicator that suggests an investment or strategy has the potential to generate positive alpha.
• Alpha signal: A signal or indicator that suggests that a security or portfolio is likely to generate alpha in the future.
• Alpha signal: A signal that is used to identify investments or portfolio positions that are expected to generate a positive alpha.
• Alpha signals: Indicators or metrics that provide insight into the potential level or direction of alpha that can be generated by a certain investment or strategy.
• Alpha signals: Signals or indicators that are believed to be associated with alpha generation.
• Alpha signals: Signals or indicators that suggest that a security or portfolio is likely to generate alpha in the future.
• Alpha simulation: A method of estimating the potential alpha that a portfolio or strategy could generate under different market scenarios or conditions.
• Alpha simulator: A tool or software that can be used to conduct alpha simulations for a portfolio or strategy.
• Alpha source: The specific investment or strategy that is the source of alpha for a portfolio or investment.
• Alpha source: The underlying factor or factors that are responsible for generating alpha in a portfolio or strategy.
• Alpha squeeze: The phenomenon where the availability of alpha in a market decreases as more investors and strategies compete for it, leading to lower returns for all participants.
• Alpha strategy: A strategy that is designed to generate alpha through security selection or active management.
• Alpha strategy: An investment strategy that aims to generate a positive alpha.
• Alpha stripping: The process of removing or adjusting the alpha factor from a portfolio or strategy in order to isolate its returns and evaluate its performance.
• Alpha test: A test used to measure the performance of an investment or portfolio, by comparing it to a benchmark or market index.
• Alpha tilt: A strategy that aims to increase the exposure to factors that are expected to generate higher alpha, such as small-cap stocks or value stocks.
• Alpha trader: A trader or portfolio manager who focuses on generating alpha, as opposed to simply replicating a benchmark or market index.
• Alpha transportation: The process of moving alpha from one market or asset class to another, often through the use of derivatives or other financial instruments.
• Alpha trap: A situation in which a portfolio or strategy appears to be generating alpha, but in reality is simply taking on more risk.
• Alpha trap: A situation where a strategy or investment appears to generate alpha, but in reality, it is due to exposure to a risk factor that is not properly captured or measured.
• Alpha vector: A set of weights or exposures that represent the level of alpha for a portfolio or strategy in different markets or asset classes.
• Alpha weighting: The weighting of securities or factors in a portfolio or strategy that are expected to generate alpha.
• Alpha: A measure of the performance of an investment or a portfolio, relative to a benchmark or market index. It represents the excess return of the investment or portfolio, over and above the return of the benchmark.
• Alpha-adjusted active information coefficient: A measure of the active correlation between a portfolio’s returns and its benchmark or market index, adjusted for the alpha it has generated.
• Alpha-adjusted active information ratio: A measure of the active risk-adjusted return of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted active Jensen’s Alpha: A measure of the active risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the risk factors of the portfolio.
• Alpha-adjusted active performance: A measure of the performance associated with the active management of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted active ratio: A ratio of the active return of a portfolio to its active risk, adjusted for the alpha it has generated.
• Alpha-adjusted active return: A measure of the return associated with the active management of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted active risk: A measure of the risk associated with the active management of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted active sharpe ratio: A measure of the active risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the volatility of the portfolio’s returns.
• Alpha-adjusted active Sortino ratio: A active risk-adjusted performance measure, adjusted for the alpha it has generated, that differentiates downside risk from total risk.
• Alpha-adjusted active Treynor ratio: A measure of the active risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the portfolio’s beta.
• Alpha-adjusted benchmark portfolio: A benchmark portfolio that has been adjusted for the alpha it has generated, in order to provide a more accurate comparison for the performance of an investment or portfolio.
• Alpha-adjusted benchmark: A benchmark that has been adjusted for the alpha that it has generated, in order to provide a more accurate comparison for the performance of an investment or portfolio.
• Alpha-adjusted benchmark: A benchmark that is adjusted for the alpha generated by a portfolio or strategy.
• Alpha-adjusted benchmark: A benchmark that is adjusted for the level of alpha it generates, often used to compare the performance of a portfolio or strategy to a neutral benchmark.
• Alpha-adjusted beta: A measure of a portfolio’s sensitivity to market movements, adjusted for the alpha it has generated.
• Alpha-adjusted conditional value-at-risk (CVaR): A measure of the expected loss of a portfolio, adjusted for the alpha it has generated, in the event that the portfolio’s returns fall below a certain level.
• Alpha-adjusted downside deviation: A measure of the deviation of a portfolio’s returns below a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted downside kurtosis: A measure of the kurtosis of a portfolio’s returns below a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted downside semi-deviation: A measure of the deviation of a portfolio’s returns below a certain level, adjusted for the alpha it has generated, that excludes returns that fall within a certain range of the portfolio’s mean return.
• Alpha-adjusted downside skewness: A measure of the skewness of a portfolio’s returns below a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted downside variance: A measure of the variance of a portfolio’s returns below a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted higher-moment risk: A measure of the risk associated with the higher moments of a portfolio’s returns, such as skewness and kurtosis, adjusted for the alpha it has generated.
• Alpha-adjusted information coefficient: A measure of the correlation between a portfolio’s returns and its benchmark or market index, adjusted for the alpha it has generated.
• Alpha-adjusted information ratio: A measure of risk-adjusted returns that takes into account the level of alpha generated by a portfolio or strategy, and compares it to the benchmark.
• Alpha-adjusted information ratio: A measure of the risk-adjusted return of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted Jensen’s Alpha: A measure of the risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the risk factors of the portfolio.
• Alpha-adjusted return: A return that has been adjusted to account for the level of alpha generated by a portfolio or strategy.
• Alpha-adjusted return: The return of a portfolio or strategy after adjusting for the alpha generated.
• Alpha-adjusted return: The return of a portfolio or strategy after adjusting for the level of alpha it generates, often used to compare the performance of different investments or strategies.
• Alpha-adjusted return: The return of an investment or portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted returns: Returns that have been adjusted to account for the level of alpha generated by a portfolio or strategy.
• Alpha-adjusted risk: The risk of a portfolio or strategy after adjusting for the alpha generated.
• Alpha-adjusted risk-adjusted performance: A measure of the performance of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted ratio: A ratio of the return of a portfolio to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted return on assets (ROA): A measure of the return on assets of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted return on assets under management (RAUM): A measure of the return on assets under management of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted return on capital (ROC): A measure of the return on capital of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted return on equity (ROE): A measure of the return on equity of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted return on investment (ROI): A measure of the return on investment of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted risk-adjusted return: A measure of the return of a portfolio relative to its risk, adjusted for the alpha it has generated.
• Alpha-adjusted Sharpe ratio: A measure of risk-adjusted returns that takes into account the level of alpha generated by a portfolio or strategy.
• Alpha-adjusted sharpe ratio: A measure of the risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the volatility of the portfolio’s returns.
• Alpha-adjusted Sortino ratio: A risk-adjusted performance measure, adjusted for the alpha it has generated, that differentiates downside risk from total risk.
• Alpha-adjusted style information coefficient: A measure of the style correlation between a portfolio’s returns and its benchmark or market index, adjusted for the alpha it has generated.
• Alpha-adjusted style information ratio: A measure of the style risk-adjusted return of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted style Jensen’s Alpha: A measure of the style risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the risk factors of the portfolio.
• Alpha-adjusted style performance: A measure of the performance associated with the investment style of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted style ratio: A ratio of the style return of a portfolio to its style risk, adjusted for the alpha it has generated.
• Alpha-adjusted style return: A measure of the return associated with the investment style of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted style risk: A measure of the risk associated with the investment style of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted style sharpe ratio: A measure of the style risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the volatility of the portfolio’s returns.
• Alpha-adjusted style Sortino ratio: A style risk-adjusted performance measure, adjusted for the alpha it has generated, that differentiates downside risk from total risk.
• Alpha-adjusted style Treynor ratio: A measure of the style risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the portfolio’s beta.
• Alpha-adjusted tail-risk premium: A measure of the excess return of a portfolio above a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted tail-risk return: A measure of the return of a portfolio below a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted tail-risk: A measure of the risk that a portfolio’s returns will fall below a certain level, adjusted for the alpha it has generated.
• Alpha-adjusted tracking difference: The difference between a portfolio’s return and its benchmark or market index, adjusted for the alpha it has generated.
• Alpha-adjusted tracking error: A measure of the deviation of a portfolio or strategy’s returns from its benchmark, adjusted for alpha.
• Alpha-adjusted tracking error: A measure of the deviation of a portfolio’s return from its benchmark or market index, adjusted for its generated alpha.
• Alpha-adjusted Treynor ratio: A measure of the risk-adjusted return of a portfolio, adjusted for the alpha it has generated, and taking into account the portfolio’s beta.
• Alpha-adjusted value-at-risk (VaR): A measure of the potential loss of a portfolio, adjusted for the alpha it has generated.
• Alpha-adjusted VaR-CVaR: A measure of the potential loss of a portfolio, adjusted for the alpha it has generated, that takes into account both value-at-risk and conditional value-at-risk.
• Alpha-adjusted volatility: Volatility that has been adjusted to account for the level of alpha generated by a portfolio or strategy.
• Alpha-adjustment: The process of adjusting a portfolio or investment strategy for the alpha it has generated.
• Alpha-arbitrage: The process of exploiting market inefficiencies to generate a positive alpha.
• Alpha-capture strategy: A strategy that focuses on identifying and investing in securities or factors that have the potential to generate alpha.
• Alpha-capture: The process of identifying and investing in securities or factors that have the potential to generate alpha.
• Alpha-constrained: Describing an investment strategy or portfolio that is constrained in terms of the alpha it can generate.
• Alpha-driven portfolio: A portfolio that is constructed with the goal of generating alpha through active management or security selection.
• Alpha-driven strategy: A strategy that is driven by the goal of generating alpha through active management or security selection.
• Alpha-driven: A strategy or approach that is driven by the goal of generating alpha through active management or security selection.
• Alpha-driven: A strategy or portfolio that is driven by the goal of generating alpha.
• Alpha-efficient frontier: The set of portfolios that offer the highest expected return for a given level of alpha risk.
• Alpha-equivalent: A portfolio or strategy that generates the same level of alpha as another portfolio or strategy, but with different risk characteristics.
• Alpha-factor based: A strategy or portfolio that is based on the alpha factors that are expected to generate alpha.
• Alpha-factor driven: A strategy or portfolio that is driven by the goal of exploiting the alpha factors that are expected to generate alpha.
• Alpha-factor oriented: A strategy or portfolio that is oriented towards the alpha factors that are expected to generate alpha.
• Alpha-focused: A portfolio or strategy that is designed to generate alpha as its primary objective.
• Alpha-generating portfolio: A portfolio that is constructed with the aim of generating alpha through active management or security selection.
• Alpha-generating portfolio: A portfolio that is designed to generate alpha through security selection or active management.
• Alpha-generating strategy: A strategy that aims to generate alpha through active management or security selection.
• Alpha-generating strategy: A strategy that is designed to generate alpha through security selection or active management.
• Alpha-generating: A portfolio or strategy that is designed to generate alpha through security selection or active management.
• Alpha-generating: A strategy or approach that aims to generate alpha through active management or security selection.
• Alpha-generating: Describing the ability of an investment to produce positive alpha.
• Alpha-generating: The process of generating alpha through a portfolio or strategy.
• Alpha-harvesting: The process of generating alpha by taking advantage of market inefficiencies or other opportunities.
• Alpha-hedged: A portfolio or strategy that is designed to protect against the risk of negative alpha.
• Alpha-maximization strategy: A strategy that aims to maximize the alpha generated by a portfolio through active management or security selection.
• Alpha-maximization: The process of maximizing the alpha generated by a portfolio or strategy through active management or security selection.
• Alpha-maximizing: A strategy or approach that aims to generate the highest level of alpha possible.
• Alpha-maximizing: Describing the goal of maximizing the alpha generated by an investment or portfolio.
• Alpha-neutral benchmark: A benchmark that is designed to have a neutral exposure to alpha-generating factors.
• Alpha-neutral benchmark: A benchmark that is designed to have a neutral exposure to factors that are expected to generate alpha, such as market beta or size and value factors.
• Alpha-neutral hedge: A hedge that aims to neutralize the alpha of a portfolio or investment strategy, rather than generate a positive alpha.
• Alpha-neutral portfolio: A portfolio that has had its alpha neutralized, meaning it is not designed to generate a positive or negative alpha.
• Alpha-neutral portfolio: A portfolio that is constructed to have no net exposure to alpha-generating factors, either through security selection or factor weighting.
• Alpha-neutral portfolio: A portfolio that is designed to have a neutral exposure to alpha-generating factors.
• Alpha-neutral strategy: A strategy that is constructed to have no net exposure to alpha-generating factors, either through security selection or factor weighting.
• Alpha-neutral strategy: An investment strategy that aims to neutralize the alpha of a portfolio or investment strategy, rather than generate a positive alpha.
• Alpha-neutral: A portfolio or investment strategy that is designed to have a neutral exposure to alpha, meaning it is not designed to generate a positive or negative alpha.
• Alpha-neutral: A portfolio or strategy that is constructed to have no net exposure to alpha-generating factors, either through security selection or factor weighting.
• Alpha-neutral: A portfolio or strategy that is designed to have a neutral exposure to alpha-generating factors.
• Alpha-neutral: A portfolio or strategy that is designed to have a neutral exposure to factors that are expected to generate alpha, such as market beta or size and value factors.
• Alpha-neutral: A strategy or portfolio that has no inherent bias towards generating alpha, and aims to match the returns of a benchmark.
• Alpha-neutralized: Describing a portfolio or investment strategy that has had its alpha neutralized, meaning it is not designed to generate a positive or negative alpha.
• Alpha-neutralizing overlay: An overlay strategy that aims to neutralize the alpha of a portfolio or investment strategy, rather than generate a positive alpha.
• Alpha-neutralizing: The process of neutralizing the alpha of a portfolio or investment strategy.
• Alpha-opportunity set: The set of investments or portfolio positions that are expected to generate a positive alpha.
• Alpha-optimization: The process of finding the optimal portfolio or investment strategy that maximizes alpha while minimizing risk.
• Alpha-oriented portfolio: A portfolio that is constructed with the aim of generating alpha through active management or security selection.
• Alpha-oriented strategy: A strategy that is focused on generating alpha through active management or security selection.
• Alpha-oriented: A strategy or approach that focuses on generating alpha through active management or security selection.
• Alpha-oriented: A strategy or approach that is focused on generating alpha through active management or security selection.
• Alpha-overlay: An overlay strategy which aims to generate alpha by adjusting the portfolio’s weightings to take advantage of market inefficiencies.
• Alpha-relative: Describing a portfolio or investment strategy that is relative to a benchmark or market index in terms of the alpha it generates.
• Alpha-scaling: The process of adjusting the size of an investment or portfolio position based on the expected alpha that it will generate.
• Alpha-seeking portfolio: A portfolio that is constructed with the aim of actively seeking out opportunities to generate alpha through security selection or active management.
• Alpha-seeking portfolio: A portfolio that is constructed with the aim of generating alpha through active management or security selection.
• Alpha-seeking strategy: A strategy that actively seeks out opportunities to generate alpha through security selection or active management.
• Alpha-seeking strategy: A strategy that aims to generate alpha through active management or security selection.
• Alpha-seeking: A strategy or approach that actively seeks out opportunities to generate alpha through security selection or active management.
• Alpha-seeking: A strategy or approach that aims to generate alpha through active management or security selection.
• Alpha-seeking: Describing the goal of achieving a positive alpha for investment.
• Alpha-seeking: The process of identifying and investing in opportunities that are expected to generate alpha.
• Alpha-sensitive portfolio: A portfolio that is sensitive to changes in the level of alpha generated by the portfolio.
• Alpha-sensitive strategy: A strategy that is sensitive to changes in the level of alpha generated by the strategy.
• Alpha-sensitive: A portfolio or strategy that is designed to have a high sensitivity to factors that are expected to generate alpha, such as volatility or momentum factors.
• Alpha-sensitive: A portfolio or strategy sensitive to changes in the alpha levelby the portfolio or strategy.
• Alpha-sensitive: Describing the degree to which a portfolio or investment strategy is affected by changes in alpha.
• Alpha-targeting: A strategy or approach that aims to generate a specific level of alpha.
• Alpha-weighted portfolio: A portfolio that is constructed with a bias towards securities or factors that have a higher potential for generating alpha.
• Alpha-weighted portfolio: A portfolio that is constructed with a higher weighting to securities or factors that are expected to generate alpha.
• Alpha-weighted strategy: A strategy that is constructed with a bias towards securities or factors that have a higher potential for generating alpha.
• Alpha-weighted strategy: A strategy that is constructed with a higher weighting to securities or factors that are expected to generate alpha.
• Alpha-weighted: A portfolio or investment strategy that is weighted based on the alpha of its individual components.
• Alpha-weighted: A portfolio or strategy that is constructed with a bias towards securities or factors that have a higher potential for generating alpha.
• Alpha-weighted: A portfolio or strategy that is constructed with a higher weighting to securities or factors that are expected to generate alpha.
• Alpha-weighted: A portfolio or strategy that is weighted based on its level of alpha.
• Alpha-zero portfolio: A portfolio that has no potential for generating alpha and aims to match the returns of a benchmark.
• Alpha-zero strategy: A strategy that has no potential for generating alpha and aims to match the returns of a benchmark.
• Alpha-zero: A strategy or portfolio that has no potential for generating alpha and aims to match the returns of a benchmark.
• Beta: A measure of the volatility of an investment relative to the overall market.
• Bullet Point List All Alpha: Terminology and Related Definitions.
• Capital asset pricing model (CAPM): A model that describes the relationship between risk and expected return for assets, and is used to determine the cost of equity capital.
• Capital market line (CML): A graphical representation of the trade-off between risk and expected return for investments that lie on the efficient frontier.
• Diversification: A risk management technique that aims to reduce a portfolio’s overall risk by investing in a variety of assets that have low correlations with one another.
• Efficient frontier: The set of portfolios that offer the highest expected return for a given level of risk, or the lowest risk for a given level of expected return.
• Expected return: The average return that is expected from an investment over a specified period of time.
• Fundamental analysis: The analysis of a company’s financial and economic conditions to determine its intrinsic value.
• Modern portfolio theory (MPT): A theory that describes the trade-off between risk and expected return for portfolios of assets, and is used to determine the optimal combination of assets for a given level of risk.
• Portfolio optimization: The process of selecting the optimal combination of assets for a portfolio in order to maximize expected return or minimize risk.
• Risk-adjusted return: The return of an investment after adjusting for the amount of risk that was taken on.
• Ron Legarski Alpha: Terminology Defined
• Sharpe ratio: A measure of an investment’s excess return per unit of risk.
• Systematic risk: The risk that is inherent in the market as a whole, and cannot be diversified away through portfolio construction.
• Total return: The return of an investment including both capital appreciation and income.
• Unsystematic risk: The risk that is specific to a particular security or sector, and can be diversified away through portfolio construction.

Please note that these terms may not be universally agreed upon or used in practice, and different sources may use them differently or not at all. Additionally, some of these terms could be specific to quantitative finance, so it’s essential to be aware of the context in which they are used.

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