Alpha & Beta

How to use Alpha(α)?

If Alpha is positive the stock outperforms, if the value is negative means the stock underperforms.
α < 0: The investment has earned too little for its risk (or, was too risky for the return)
α = 0: The investment has earned a return adequate for the risk taken
α > 0: The investment has a return in excess of the reward for the assumed risk

How to use Beta(β)?

β = 1: Exactly as volatile as the index
β > 1: More volatile than the index
β < 1 > 0: Less volatile than the index
β = 0: Uncorrelated to the index
β < 0: Negatively correlated to the index
β > 2: Trending stock
Higher the β higher risk/reward
Example: If the beta is 1.1, the share price is like to move by 10% more than the index

Trading Tip

Choose a stock with Alpha greater than 0 and Beta greater than 1.9 for intraday in 5min timeframe for long positions
Remember that such stocks will have high risk and high reward
Shortlist stocks with Beta greater than 1.9 for next day in 5min timeframe
הערות שחרור: Update v1.1
Added up or down arrows which indicates whether the value is increasing or decreasing compared to the previous value
הערות שחרור: Updated position.
הערות שחרור: Updated text alignment and text position.
הערות שחרור: Converted from label to table view.
סקריפט קוד פתוח

ברוח TradingView אמיתית, מחבר סקריפט זה פרסם אותו עם קוד פתוח, כך שסוחרים יוכלו להבין ולאמת זאת. הידד למחבר! אתה יכול להשתמש בו בחינם, אך שימוש חוזר בקוד זה בפרסום הנו בכפוף ל כללי הבית . אתה יכול להגדירו כמועדף ולהשתמש בו בגרף.

רוצה להשתמש בסקריפ זה בגרף?


Can't see values
+3 השב
you have 3 alpha beta indicator, compared to other indicator this was nice and lite in use. but it does not give exact result as other two indicator. check and fix bug. i checked in google alpha beta value was different then indicator was showing. your other 2 indicator was giving same result as in google. check and fix error. this indicator is good in design and lite to use.
+1 השב
Arun_K_Bhaskar AvinashTrade
@AvinashTrade, The other two are screeners. The formula used are same.
AvinashTrade Arun_K_Bhaskar
@Arun_K_Bhaskar, does it work for all sectors for options, future, equity, commodity.
Arun_K_Bhaskar AvinashTrade
@AvinashTrade, Replace Nifty50 with respective index for sector wise values.
does it work automatically wen we apply. if not we need to select particular stocks in setting index. because wen i applied indicator it was showing different alpha and beta value. when i checked setting it was showing index option as nifty, later i changed for my stocks it got changed its value. every time we need to select for particular stock.
+1 השב
Arun_K_Bhaskar AvinashTrade
@AvinashTrade, you need to manually put the respective index.
AvinashTrade Arun_K_Bhaskar
@Arun_K_Bhaskar, i tried to add in index, for all the company it was showing alpha =0 and beta=1. if i dont change in index it shows different value which is not equal in any websites.
can u please tell me. how can i use it. value shown is correct compared to other trading websites like moneycontrol, economic times etc.
Thanks, I could see the values in the right side of the screen as you scroll in line with last candle closure level. my set up is 5 minutes chart with Chart as WHITE background theme and in the indicator setting Alpha Text Color as BLACK. If you have black chart theme then you need have setting in the Alpha Text Color as White.
+1 השב
Arun_K_Bhaskar rameshvisva
@rameshvisva, there is an ontion in it.