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Alpha & Omega Semiconductor Annual Report 2020 Form 10K (NASDAQ:AOL) Published: September 2nd, 2020PDF generated by stock light. Counted STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
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Alpha is a term used in finance to describe the excess return of an investment relative to a benchmark index. Meaning that the returns of the investment are greater than the expected returns based on the risk taken.
Investment managers and financial analysts are typically required to calculate and report alpha as part of their performance evaluation and reporting.
To calculate alpha, you would compare the actual return of an investment to the return that would be expected based on its level of risk. The formula for calculating alpha is: (Actual Return - Expected Return)
The purpose of alpha is to measure the skill of an investment manager in generating returns above the market benchmark, taking into account the level of risk involved.
The information reported on alpha definition typically includes the actual return of the investment, the expected return based on the benchmark index, and the calculated alpha value.
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