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.

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).
References in periodicals archive ?
estate is reduced to a 0% residual return by the incurrence of 10%
This translates into an immediate, tangible and residual return on security investment," he added.
Equation (1) says that an initial franchisee with an exclusive territorial guarantee receives for certain the residual return from a single retail outlet plus half of the incremental profits from installing a second retailer when doing so is profit maximizing.
This implies that the daily excess return of companies in the Chapter 11 sample is significantly lower than the corresponding residual return of the non-Chapter 11 group with the same bond downgrading.
The prediction error or residual return is defined as [PE.
Traditional capital market approaches use cross-sectional approximations of mean abnormal returns and standard errors, and hence, characterize the economic significance of a single firm's residual return in terms of sample-wide rather than firm-specific residual return variability.
Jack Ehrman, Principal of Post, expands on that theory, adding "Post is almost exclusively targeting real estate institutions, such as REIT's, that do not need to meet residual return hurdles nor surmount high leverage obstacles.
Using CRSP daily returns, we estimate idiosyncratic volatility or the standard deviation of daily residual returns, where residual returns are errors from a daily four-factor model.
Ltd, as well as the right to receive 100% of the expected economic residual returns from Chifeng Haozhou Mining Co.
The holders of equity interest, as a group, do not possess the power to direct the activities of the company through voting rights; the obligation to absorb expected losses or the right to receive expected residual returns (management derives the expected losses and expected residual returns based on the estimated cash flows); and disproportionate voting rights in comparison to economic interest.
The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns, or both, as a result of holding variable interests, which are the ownership, contractual, or other pecuniary interests in an entity that change with changes in the fair value of the entity's net assets excluding variable interests.
Sometimes individuals form an enterprise not in anticipation of handsome residual returns, but rather for their own use.