Residual Return

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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 ?
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.
large difference between absolute and residual returns, while a liquid
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.
Interpretation 46 changes that by requiring a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both.
CLJC, through its wholly owned Chinese subsidiaries, owns the rights to receive the expected residual returns from Chifeng Haozhou Mining Co.
Exhibit B-Allocation of Residual Gains & Expected Losses Expected Recipient-Gains Performance Residual Residual returns (2) losses (3) Equity (R) Lessee (M) Bank Outstanding $7,575 $7,575 Very good $7,150 $7,150 Good $14,175 $14,175 Poor ($5,700) Very poor ($13,275) Extremely poor ($9,925) $28,900 ($28,900) $21,750 $7,150 $0 Performance Expected Recipient-Lessee Equity (R) Lessee (M) Bank Outstanding Very good Good Poor ($5,700) Very poor ($13,275) Extremely poor ($9,925) $0 ($18,975) ($9,925)
Ownership is the right to an asset's residual returns and to control over the asset (p.
Because the firms in the Chapter 11 and matching samples are selected such that both have identical rating changes, the fact that these two samples reveal different residual returns around the downgrading suggests that while the rating agencies provide new information to the equity market, this information is not complete.
4) The Z-statistic described in Brown and Warner (1985) is used to test the null hypothesis that TRA |86 did not uniquely impact the cumulative residual returns of insurers.