Alpha = Actual Return minus Expected Return (or Benchmark) 🧮

But, what are actual and expected returns? 🫤

First, we need to know what return is 🤔

💡Return = the potential profit of a stock investment! If a stock's price increases 20% this year, its return for the year is 20%

Actual Return = an investment's real return over a period of time 🤑

To check the return of any stock on Bloom, you can open its page & toggle the graph to view its return from 1 day all the way to 5 years! 🌹

Expected Return = the return that you or other investors were expecting or predicting 📈

In most cases, expected return uses a benchmark, like the S&P 500 -- check out the SPY ETF to see the S&P 500's returns! 📊

So, the expected return would be the S&P 500's return 💡

Let's say Stock A has a return of 12% over a year, and the S&P 500 has a return of 10% over the same period. 📝

In this case, Stock A has an Alpha of 12% ➖ 10% = 2%! 🥳

On Bloom, there's a section where you can view a stock's Alpha directly -- just scroll down on any stock's page 😲

Here, try it with Tesla!