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Alpha (α)
QuantThe portion of an investment's return that is not explained by exposure to broad market risk. The signal beyond the benchmark.
Full definition
Alpha is the residual return after stripping out beta, sector, style, and factor exposure. In a systematic book, alpha is what the strategy is supposed to produce in excess of its benchmark. The qualitative question. does this strategy actually have alpha? to is the question the G1 to G31 evaluation stack on /methodology is designed to answer honestly. A positive expected alpha that survives walk-forward, multiple-testing correction, and out-of-sample testing is what counts as 'real' alpha on this site.
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