Schuler Capital Management LLC
  • Approach
    • What Makes Us Different
    • How We Work With Clients
    • About Us
  • Risk Model
    • Safeguard 1st Risk Model
    • Why Does It Work?
    • Risk Management vs Market Timing
    • Key Takeaways
    • What Is Safeguard 1st Telling Us Now? >
      • Current Safeguard 1st Signals
  • Strategies
    • Safeguard 1st Strategy
    • Large Cap Momentum Strategy
    • Small Cap Momentum Strategy
    • Custom Strategies
  • Reasons Why
    • Buy & Hold May Not Always Be Best
    • The Achilles Heel of the 60/40 Portfolio
    • Is Your Portfolio Really Diversified?
    • Gradually Shifting Asset Allocations Doesn't Effectively Manage Risk
    • Cash Is Not Trash
    • Fees Matter
    • What To Know About Track Records
  • Technical
    • Backtesting Methodology & Results >
      • Backtesting Description
      • Indicators & Risk Model: Description & Development
      • Safeguard 1st - Backtest Results
      • Large Cap Mo - Backtest Results
      • Small Cap Mo - Backtest Results
      • Dividend & Interest Assumptions
      • Transaction Cost Assumptions
    • Data Facts
    • Definitions >
      • Alpha
      • Beta
      • Black Swan
      • Correlation
      • Drawdown
      • Efficient Mkt Hypothesis
      • Market Timing
      • Profit Factor
      • Risk
    • More...Definitions >
      • Risk Measures >
        • Sharpe Ratio
        • Sortino Ratio
        • Standard Deviation
        • Volatility
      • R-Squared
    • Diversifying Company Risk
    • Momentum
    • Stop Loss Dangers
    • Tax Considerations
    • Timing of Signals/Trades
    • Using Our Charts/Tables
  • Approach
    • What Makes Us Different
    • How We Work With Clients
    • About Us
  • Risk Model
    • Safeguard 1st Risk Model
    • Why Does It Work?
    • Risk Management vs Market Timing
    • Key Takeaways
    • What Is Safeguard 1st Telling Us Now? >
      • Current Safeguard 1st Signals
  • Strategies
    • Safeguard 1st Strategy
    • Large Cap Momentum Strategy
    • Small Cap Momentum Strategy
    • Custom Strategies
  • Reasons Why
    • Buy & Hold May Not Always Be Best
    • The Achilles Heel of the 60/40 Portfolio
    • Is Your Portfolio Really Diversified?
    • Gradually Shifting Asset Allocations Doesn't Effectively Manage Risk
    • Cash Is Not Trash
    • Fees Matter
    • What To Know About Track Records
  • Technical
    • Backtesting Methodology & Results >
      • Backtesting Description
      • Indicators & Risk Model: Description & Development
      • Safeguard 1st - Backtest Results
      • Large Cap Mo - Backtest Results
      • Small Cap Mo - Backtest Results
      • Dividend & Interest Assumptions
      • Transaction Cost Assumptions
    • Data Facts
    • Definitions >
      • Alpha
      • Beta
      • Black Swan
      • Correlation
      • Drawdown
      • Efficient Mkt Hypothesis
      • Market Timing
      • Profit Factor
      • Risk
    • More...Definitions >
      • Risk Measures >
        • Sharpe Ratio
        • Sortino Ratio
        • Standard Deviation
        • Volatility
      • R-Squared
    • Diversifying Company Risk
    • Momentum
    • Stop Loss Dangers
    • Tax Considerations
    • Timing of Signals/Trades
    • Using Our Charts/Tables
Alpha
 
Alpha is used in finance as a measure of performance.  Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark, which is considered to represent the market’s movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment’s alpha.   If it is a positive number, the manager or strategy is beating the benchmark.
 
Alpha is used for mutual funds and all types of investments.  It is often represented as a single number (like 3 or -5), but this refers to a percentage measuring how the portfolio or fund performed compared to the benchmark index (i.e. 3% better or -5% worse).  Alpha is also often referred to as “excess return” or “abnormal rate of return.”
Alpha is the risk-adjusted return of a strategy or portfolio in excess of the market index or other benchmark.   It measures a manager's incremental return that cannot be attributed to market movements.
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