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Glossary

Alpha

Alpha measures the return an investment generates above what a benchmark (like the S&P 500) would have produced on its own. A positive alpha means a strategy is beating the market after adjusting for risk; a negative alpha means it is underperforming. Analysts often use alpha to judge whether a stock-picking process - including automated ones - is actually adding value.

Related terms
BenchmarkA benchmark is a reference index or portfolio (such as the S&P 500 or QQQ) used to judge whether an investment or strategy is performing well. "Beating...10-Q FilingA 10-Q is the quarterly counterpart to the 10-K - a less detailed, unaudited financial report companies file three times a year between annual reports....Analyst Consensus EstimateThe analyst consensus is the average forecast (for earnings, revenue, price targets, and more) across all the Wall Street analysts covering a stock. It...10-K FilingA 10-K is the annual report public companies are required to file with the SEC, covering audited financials, risk factors, and management's discussion...
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