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Performance
8 guides in Finabase Learn
- Alpha The part of a portfolio's return not explained by its market exposure; positive alpha means it beat its risk-adjusted benchmark.
- Annualized return A multi-year return restated as the steady yearly rate that would compound to the same result, making periods comparable.
- Benchmark A standard, usually an index, against which the performance of a portfolio, fund or manager is measured.
- Drawdown The decline from a portfolio's or price's peak to its subsequent trough, usually stated as a percentage.
- Expected return The probability-weighted average of possible outcomes for an investment; an estimate, not a promise.
- Real return An investment’s return after subtracting inflation, showing the change in actual purchasing power rather than in dollars.
- Sharpe ratio A measure of risk-adjusted return: how much excess return over the risk-free rate a portfolio earned for each unit of volatility it carried.
- Total return An investment’s full gain or loss over a period, counting price change plus dividends or interest received, usually assuming they are reinvested.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.