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Rick

Alpha

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Alpha

How a stock outperforms or underperforms the broader market. Usually measured against the Dow Jones Industrial Average or the S&P 500.

This chart measures the performance of America Online, McDonalds and UAL against the Dow Jones Industrial Average from January, 1998 to June, 1998. America Online and McDonalds have positive alphas (with America Online being higher), while UAL under-performed the Dow, garnering a negative alpha.

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