Tag
#alpha
2 articles
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Benchmark Selection for Portfolios: How the Wrong Benchmark Invents Alpha
Choosing a benchmark is not administrative. The benchmark defines what counts as skill, so a mismatched one manufactures alpha or hides it. Here is how to select one properly.
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What Is Alpha in Investing? Return Beyond the Benchmark, Explained
Alpha is the return a portfolio earned beyond what its benchmark exposure and risk already explain. It is a residual, and it depends entirely on the benchmark chosen.
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