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(1) The net risk-adjusted premium return from a position or a portfolio. Calculated by subtracting (a) the risk-adjusted return consistent with the position or portfolio's place on the capital asset pricing model (CAPM) market line from (b) the actual return. Alpha can also be negative if the position falls below the market line. (2) The average non-systematic deviation from any performance benchmark. Also called Jensen Measure. (3) The intercept of a regression line. (4) The largest, most active stocks traded on the London Stock Exchange. The other tiers are beta (b), gamma (g) and delta (D). See also beta (b), gamma (g), delta (D).
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