Quantitative Definitions

Alpha Coefficient

Alpha Coefficient measures of the ability of an asset to generate returns for a portfolio, independent of the portfolio or market conditions.

Alpha

A measure of a mutual fund’s risk relative to the overall market. It reflects the difference between a mutual fund’s actual performance and the performance expected based on risk level taken by the fund’s manager. A fund that produced the expecte

R Squared

R squared is used to measure the extent to which an investment, such as a mutual fund, follows a given index. A R squared measure of 0.85 means that 85% of the movement in the fund is attributable to the index which it most closely follows. An index fund or ETF should have an R squared of 1.00 or ve