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alpha definition - finance
A measure of the risk-adjusted performance of an investment that factors in the individual risk of the security and not the overall market risk. A large alpha indicates that the stock or mutual fund has performed better than would be predicted given its beta, which is a measurement of an investmentÂ’s volatility.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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