What does Lester mean by pure alpha?

When Lester refers to pure Alpha in the very first mission, it actually means nothing in terms of stocks in the game.

What does it mean to trade pure alpha?

Make a profit over your total investments in the stock market. If you are having trouble turning a profit, wait until Franklin can assassinate targets for Lester. Lester will tell you which company will be in the green when someone meets with an unfortunate end.

What is pure alpha?

Pure Alpha is a global stock market investing strategy based on a risk factor approach similar to Smart Beta. These systems are market neutral and generate income in any state of the stock market.

What is the pure alpha strategy?

Pure Alpha Strategy: Diversification He and his team had an epiphany: proper diversification could reduce risk without harming returns. The typical idea of diversification at the time was merely to diversify within an asset class. Instead of just holding a single stock, a fund manager might buy a hundred stocks.

What is the best portfolio beta?

For example, a portfolio with an overall beta of +0.7 would be expected to earn 70% of the market’s return under normal circumstances. Portfolios, however, can also have betas greater than 1.0, such that a portfolio with a beta of +1.25 would be expected to earn 125% of the market’s return and so on.

What is a good Alpha for a portfolio?

Alpha is also a measure of risk. An alpha of -15 means the investment was far too risky given the return. An alpha of zero suggests that an asset has earned a return commensurate with the risk. Alpha of greater than zero means an investment outperformed, after adjusting for volatility.

Is a high alpha good or bad?

The difference between the fund’s actual return and its expected return is its alpha. If alpha is positive, it means that the fund returned more than its expected return, whereas a negative alpha indicates that the fund returned less. If the fund had a beta of 0.5, its expected return would be just 4%.

Is Beta better than Alpha?

Key Takeaways. Alpha shows how well (or badly) a stock has performed in comparison to a benchmark index. Beta indicates how volatile a stock’s price has been in comparison to the market as a whole. A high alpha is always good.

What is a good beta?

A stock that swings more than the market over time has a beta above 1.0. If a stock moves less than the market, the stock’s beta is less than 1.0. High-beta stocks are supposed to be riskier but provide higher return potential; low-beta stocks pose less risk but also lower returns.

What is a good alpha ratio?

Simply stated, alpha is often considered to represent the value that a portfolio manager adds or subtracts from a fund portfolio’s return. A positive alpha of 1 means the fund has outperformed its benchmark index by 1%. For investors, the more positive an alpha is, the better it is.