New Delhi, March 27 -- Most investors track their investments' performance to determine whether their strategies are achieving the desired results. Along with aligning with personal financial goals, checking an investment's performance helps understand its relative performance to the benchmark index. One key measure to check this is alpha.

Alpha, a technical analysis tool used in the stock market, is denoted by the Greek letter - α. It shows the excess return of an investment relative to a benchmark index.

Alpha is calculated by comparing the actual returns of an investment to the returns estimated by a benchmark index, taking into account the investment's beta, which reflects its sensitivity to the market.

If alpha is positive, i...