Residual Return

Residual Return

Return independent of the benchmark. The residual return is the return relative to beta times the benchmark return. To be exact, an asset's residual return equals its excess return minus beta times the benchmark excess return.

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Residual Return

A return on an investment that is independent of the investment's benchmark. It is calculated as follows:

Residual return = Excess return - (Benchmark's excess return * beta).