I am a beginner.
In the tutorial(Getting Started Tutorial), I tried the cord below;
from alphalens.tears import create_full_tear_sheet
create_full_tear_sheet(al_data) then, i got this sheet;
Ann. alpha -0.010
beta 0.113
Mean Period Wise Return Top Quantile (bps) 0.194
Mean Period Wise Return Bottom Quantile (bps) -0.434
Mean Period Wise Spread (bps) 0.628
So, what does "beta" mean?
First off, welcome to Quantopian and the world of quant finance! There is a very good video explaining alpha and beta in this post (https://www.quantopian.com/posts/alpha-and-beta-in-finance) Take a look. If you have any questions after that, either reply here, or probably better, reply to that post where it might help others too.
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Hello,
Thank you for recommending the video which explains "beta"!!
I could understand well and realized there are many things I have to learn.
Hi ,
"Beta" is a coefficient that corresponds to the sensitivity of an asset to a benchmark (e.g SPY) that is to say it's a measure of how risky an asset is.
As an example ,
Suppose that the beta of an asset like AAPL is equal to 2 . This means that if SPY varie about 10% than AAPL will , in theory , vary by 20%.
Hope It's clear for you :)
The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.
In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.
