Explain in your words what beta and alpha measure. Also, provide an interpretation of the results of
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Explain in your words what beta and alpha measure.
Also, provide an interpretation of the results of alpha and beta for this three companies :
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symbol 1 ERIE 2 ALL 3 AJG Active Premium 0.0234 -0.0227 0.1075 Alpha AnnualizedAlpha Beta 0.0103 0.0023 0.0118 Beta- 0.1314 0.2771 0.1482 0.0274 0.6396 0.7035 0.7068 0.1518 0.6184 Beta+ 0.3170 0.5738 0.3936 Correlation 0.2374 0.6499 0.6408 Correlationp- value 0.0297 0.0000 0.0000 Information Ratio 0.0886 -0.1388 0.6551 R- squared 0.0564 0.4224 0.4106 TrackingError TreynorRatio 0.2648 0.1635 0.1641 0.5233 0.1546 0.3704 symbol 1 ERIE 2 ALL 3 AJG Active Premium 0.0234 -0.0227 0.1075 Alpha AnnualizedAlpha Beta 0.0103 0.0023 0.0118 Beta- 0.1314 0.2771 0.1482 0.0274 0.6396 0.7035 0.7068 0.1518 0.6184 Beta+ 0.3170 0.5738 0.3936 Correlation 0.2374 0.6499 0.6408 Correlationp- value 0.0297 0.0000 0.0000 Information Ratio 0.0886 -0.1388 0.6551 R- squared 0.0564 0.4224 0.4106 TrackingError TreynorRatio 0.2648 0.1635 0.1641 0.5233 0.1546 0.3704 symbol 1 ERIE 2 ALL 3 AJG Active Premium 0.0234 -0.0227 0.1075 Alpha AnnualizedAlpha Beta 0.0103 0.0023 0.0118 Beta- 0.1314 0.2771 0.1482 0.0274 0.6396 0.7035 0.7068 0.1518 0.6184 Beta+ 0.3170 0.5738 0.3936 Correlation 0.2374 0.6499 0.6408 Correlationp- value 0.0297 0.0000 0.0000 Information Ratio 0.0886 -0.1388 0.6551 R- squared 0.0564 0.4224 0.4106 TrackingError TreynorRatio 0.2648 0.1635 0.1641 0.5233 0.1546 0.3704
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Beta and alpha are two important measures used in finance to analyze the risk and return of a security or portfolio Beta measures the volatility of a ... View the full answer
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