Why is alpha considered an important measure for evaluating cryptocurrency portfolios?

3 answers

• Nov 29, 2021 · 3 years ago
  Alpha is an essential metric for evaluating cryptocurrency portfolios as it measures the excess return generated by a portfolio compared to its benchmark. It provides insights into the skill of the portfolio manager in generating returns that are not solely attributable to market movements. A positive alpha indicates that the portfolio has outperformed the market, while a negative alpha suggests underperformance. By considering alpha, investors can assess whether the portfolio manager's strategies and decisions have added value to the portfolio's performance.
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• Nov 29, 2021 · 3 years ago
  When it comes to evaluating cryptocurrency portfolios, alpha is like the secret sauce. It tells you whether the portfolio manager has the magic touch or not. If the alpha is positive, it means the manager has managed to beat the market and generate excess returns. On the other hand, a negative alpha indicates that the manager has underperformed. So, if you want to know how good a cryptocurrency portfolio is, just look at its alpha!
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• Nov 29, 2021 · 3 years ago
  Alpha is a crucial measure for evaluating cryptocurrency portfolios because it helps investors determine whether the portfolio's returns are due to skill or luck. It takes into account the risk-adjusted performance of the portfolio and provides a clearer picture of the manager's ability to generate returns. For example, a portfolio with a high alpha may have outperformed the market by taking on higher risks, while a low alpha may indicate that the manager has not been able to generate excess returns. By considering alpha, investors can make more informed decisions about which cryptocurrency portfolios to invest in.
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