The α coefficient (α) is the difference between the actual return of the fund and the expected return calculated according to the β coefficient. Its calculation method is as follows: the excess return is the income of the fund MINUS the income of risk-free investment (in China, it is the income of 1 year bank time deposit); Expected return is the product of beta coefficient β and market return, which reflects the income of the fund due to the overall changes in the market; The difference between the excess return and the expected return is the α coefficient.

beta coefficient

Beta coefficient is a relative index to measure the overall volatility of fund returns relative to performance evaluation benchmark returns. The higher the beta, the greater the fluctuation of the fund relative to the performance evaluation benchmark. If β is greater than 1, the volatility of the fund is greater than that of the performance evaluation benchmark. or vice versa, Dallas to the auditorium

If β is 1, the market will rise by 10% and the fund will rise by10%; The market fell 10%, and the fund fell accordingly 10%. If β is 1. 1 and the market rises 10%, the fund rises11%; When the market falls 10%, the fund falls 1 1%. If β is 0.9 and the market rises by 10%, the fund will rise by 9%; When the market fell 10%, the fund fell by 9%.

R plaza

R-squared reflects the influence of the change of performance benchmark on the performance of the fund, with the influence degree ranging from 0 to 100. If the R-squared value is equal to 100, it shows that the change of fund income is completely caused by the change of performance benchmark; If the R-squared value is equal to 35, 35% of the fund's income can be attributed to the change of performance benchmark. In short, the lower the square value of R, the smaller the change of fund performance caused by the change of performance benchmark. In addition, R square can also be used to determine the accuracy of β coefficient (β) or α coefficient (α). Generally speaking, the higher the R-squared value of a fund, the higher the accuracy of its two coefficients.