Alpha measures outperformance against the benchmark index per same unit of risk. Here are some examples to illustrate how Alpha is calculated.

Say, the index delivered 10% return and had a maximum drawdown of -10%.

Example 1 : Your investment delivered 20% return and had a maximum drawdown of -10% during the same period. Then your portfolio's alpha is 2X. I.e: it has outperformed the index by 2 times.

Example 2 : Your investment delivered 20% return and had a maximum drawdown of -5% during the same period. Then your portfolio's alpha is 4X. I.e: it has outperformed the index by 4 times.

Example 3 : Your investment delivered 20% return and had a maximum drawdown of -40% during the same period. Then your portfolio's alpha is 0.5X. I.e: it has underperformed the index and has only delivered half the return per same unit of risk.

India equity mutual funds performance is calculated as the average performance of all equity mutual funds that have been in existence since 1st Jan, 2016.

{{bMarkName}} optimised portfolio's performance is calculated as the performance of the optimised portfolio generated by Spotalpha's portfolio optimiser if the constituents of {{bMarkName}} index were provided as inputs. Performance is measured since 1st Jan, 2016

{{bMarkName}} equal allocation portfolio's performance is calculated as the performance of a portfolio where each constituent of {{bMarkName}} index were provided equal investment/allocation every day. Performance is measured since 1st Jan, 2016

The significance of {{bMarkName}} equal allocation portfolio is that it acts as a benchmark for evaluating the alpha (outperformance) generated through selection and allocation efficiency of the portfolio optimiser.