Did you know there's a special number that investors use to evaluate how different stocks have performed? 👀

💡Alpha = a measure of an investment's excess return compared to its benchmark

📝 For stocks, the benchmark is often the S&P 500.

Alpha exists outside of the stock market too 🌍

Think of Alpha as a football team's performance compared to the league average 🤔🏈

If a team scores more goals than the average team, it has a positive Alpha 🏆

If the team scores fewer goals than the average team, it has a negative Alpha 😥

Alpha is not a guarantee of future performance and should not be the only metric used to evaluate a stock or portfolio 🧠

Still, understanding Alpha is key for investors who want to make informed investment decisions and evaluate stocks' performance 💰

Next, we'll show you exactly how to calculate Alpha for a stock!