Alpha

The excess return of an investment relative to a benchmark index.

What Is Alpha?

Alpha represents the extra return an investment generates beyond what would be expected based on its risk level (beta). Positive alpha means the investment outperformed its benchmark; negative alpha means it underperformed.

Alpha = Actual Return - Expected Return (based on beta)

Why Alpha Is the Holy Grail

Generating consistent alpha is the primary goal of active investors and fund managers. If you can simply buy an S&P 500 index fund (beta = 1, alpha = 0), any active strategy needs to generate positive alpha to justify its higher costs and effort.

Alpha on EarningsShot

Your prediction accuracy on EarningsShot is essentially a measure of your "earnings alpha." If you consistently predict beats and misses more accurately than the AI model or other users, you're demonstrating a genuine edge — real alpha in earnings analysis.