scorecardresearchWhat does 'alpha' in stocks mean? How does it determine the stock performance?

What does 'alpha' in stocks mean? How does it determine the stock performance?

Updated: 14 Dec 2021, 03:29 PM IST
TL;DR.
A number of technical tools are used to determine the risks and returns of a stock. Alpha is the one that is most commonly used. Let’s understand what an alpha in stock means and how it can be used to determine a stock’s performance.
Alpha is a measure of the performance of a stock or a fund in comparison to a benchmark index.

Alpha is a measure of the performance of a stock or a fund in comparison to a benchmark index.