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Measure of risk-adjusted performance. Some refer to the alpha as the difference between the investment return and the benchmark return. However, this does not properly adjust for risk. More appropriately, an alpha is generated by regressing the security or mutual fund's excess return on the benchmark (for example S&P 500) excess return. The beta adjusts for the risk (the slope coefficient). The alpha is the intercept. Example: Suppose the mutual fund has a return of 25%, and the short-term interest rate is 5% (excess return is 20%). During the same time the market excess return is 9%. Suppose the beta of the mutual fund is 2.0 (twice as risky as the S&P 500). The expected excess return given the risk is 2 x 9%=18%. The actual excess return is 20%. Hence, the alpha is 2% or 200 basis points. Alpha is also known as the Jensen Index. The alpha depends on the benchmark used. For example, it may be the intercept in a multifactor model that includes risk factors in addition to the S&P 500. Related: Risk-adjusted return.


1. The measure of the performance of a portfolio after adjusting for risk. Alpha is calculated by comparing the volatility of the portfolio and comparing it to some benchmark. The alpha is the excess return of the portfolio over the benchmark. It is important to Markowitz portfolio theory and is used as a technical indicator.

2. The excess return that a portfolio makes over and above what the capital asset pricing model estimates.


The mathematical estimate of the return on a security when the market return as a whole is zero. Alpha is derived from a in the formula Ri = a + bRm which measures the return on a security (Ri) for a given return on the market (Rm) where b is beta. See also capital-asset pricing model, characteristic line.


Alpha measures risk-adjusted return, or the actual return an equity security provides in relation to the return you would expect based on its beta. Beta measures the security's volatility in relation to its benchmark index.

If a security's actual return is higher than its beta, the security has a positive alpha, and if the return is lower it has a negative alpha.

For example, if a stock's beta is 1.5, and its benchmark gained 2%, it would be expected to gain 3% (2% x 1.5 = 0.03, or 3%). If the stock gained 4%, it would have a positive alpha.

Alpha also refers to an analyst's estimate of a stock's potential to gain value based on the rate at which the company's earnings are growing and other fundamental indicators.

For example, if a stock is assigned an alpha of 1.15, the analyst expects a 15% price increase in a year when stock prices are generally flat. One investment strategy is to look for securities with positive alphas, which indicates they may be undervalued.

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HP is pleased that Rogue Wave is continuing its support of the Tru64 UNIX platform and will continue to support our customers whenever their business needs dictate a transition to the new Itanium-based HP Integrity server family running the HP-UX11i operating environment," said Mary Ellen Lewandowski, manager of UNIX marketing, HP Business Critical Systems.
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HP's Tru64 UNIX is a proven platform within the OSS and VAS infrastructures of mobile operators," said John Trembley, director of telecom and networking at TimesTen, Inc.
The market has been responding to Compaq's UNIX offerings as evidenced by the 27 percent revenue growth (Q3Y/Y) in our Tru64 UNIX server business, more than double the rate of the market," said Bill Heil, vice president and general manager of Compaq's Business Critical Server Group.
As a port for use on top of Tru64 Unix, NDS will be able to manage servers and network devices including printers whose details are stored in the directory.
Easily installed and extremely cost-efficient, ActiveBatch supports the execution of jobs and job plans on Windows, Linux, IBM AIX, Sun Solaris, HP-UX, HP Tru64 Unix, and OpenVMS.
today announced an agreement with Compaq Computer Corporation to deliver Accelrys' industry- leading materials research software on Compaq's Tru64 UNIX operating system running on Compaq's AlphaServer platform.
Continuing to deliver on its commitment to provide enterprise customers with all the tools to build, manage and grow an Internet infrastructure, Compaq Computer Corporation (NYSE: CPQ) has announced that Nupremis will host, manage and integrate Oracle solutions for broadband access carriers, applications service providers (ASP), end users and other businesses through licensing agreements in Nupremis data centers in North America, Europe and Asia on Compaq AlphaServer systems running Compaq Tru64 UNIX.
NYSE: CPQ) unveiled worldwide its AlphaServer GS Series high-end 8-, 16- and 32-way servers running the Tru64 UNIX and OpenVMS operating systems.
The Santa Cruz Operation has announced that its Tarantella application broker is now available for Compaq Computer Corp's Tru64 Unix for Alpha-based servers and workstations.