Alpha is a risk-adjusted measure of the "active return" on an investment. The Alpha represents an asset's performance after subtracting the market's influence beyond the asset manager's control. It is used to evaluate an asset manager's added value over a certain period of time. It can also be seen as the average observed performance of an asset, while its reference index shows no performance.

A positive Alpha indicates an asset manager is outperforming the market.

Formula: At the Y-intercept to the right of the regression line where X = monthly performance of an index and Y = monthly performance of an asset (min. 12 points).