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What are the implications of alpha and beta in cryptocurrency investing?

avatarJameDec 26, 2021 · 3 years ago1 answers

Can you explain the implications of alpha and beta in cryptocurrency investing? How do these concepts affect investment decisions and portfolio performance in the crypto market?

What are the implications of alpha and beta in cryptocurrency investing?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    In cryptocurrency investing, alpha and beta are essential factors to consider. Alpha measures the risk-adjusted return of an investment, indicating its ability to outperform the market. A positive alpha suggests that the investment has generated excess returns, while a negative alpha indicates underperformance. Beta, on the other hand, measures the investment's correlation with the overall market. A beta greater than 1 implies higher volatility than the market, while a beta less than 1 suggests lower volatility. By analyzing alpha and beta, investors can assess the potential returns and risks associated with their cryptocurrency investments, allowing them to make informed decisions.