In a quest to complicate and to make analysts looking good, the alpha is a technical risk ratio to show investors if their current portfolio is headed for the toilet. A positive alpha means youre good to go and a negative one, guess what, you got it right, a bad one. Other technical risk ratios used in conjunction with Alpha are standard deviation, R-squared, Sharpe ratio and Beta. These technical tools basically tells you that hey, youre doing alright.

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