• See Standard & Poor's Corporation.

 Embedded terms in definition
Standard & poor's corporation
 Referenced Terms
 Alpha: Is a measure of the incremental reward (or loss) that an investor gained in relation to the market. Typically, this is measured as performance of a selected portfolio relative to a market benchmark. An enhanced S&p 500 portfolio might have an alpha of .25 which means that the pickup was .25% or a quarter point better than the standard.A measure of selection risk (also known as residual risk) of a mutual fund in relation to the market. A positive alpha is the extra return awarded to the investor for taking a risk, instead of accepting the market return. For example, an alpha of 0.4 means the fund outperformed the market-based return estimate by 0.4%. An alpha of -0.6 means a fund's monthly return was 0.6% less than would have been predicted from the change in the market alone. In a Jensen Index, it is factor to represent the portfolio's performance that diverges from its beta, representing a measure of the manager's performance.

 Alpha equation: The alpha of a fund is determined as follows: [ (sum of y) -((b)(sum of x)) ] / n where: n =number of observations (36 months) b = beta of the fund x = rate of return for the S&p 500 y = rate of return for the fund

 Beta: A mathematical measure of a stock's risk in relation to the overall market (usually as measured by the Standard & Poor's 500 index). The Standard and Poor's 500 Stock Index has a beta coefficient of 1.0. A beta higher than 1.0 indicates that, on average, when the market rises, the stock will rise to a greater extent and when the market falls, the stock will fall to a greater extent. A beta lower than 1.0 indicates that, on average, the stock will move to a lesser extent than the market. The higher the beta, the greater the risk. High-beta stocks are great to own in a Bull Market, but not so fun to hold in a Bear Market.Is a quantitative measure of a security, basket, or funds behavior relative to the market or benchmark. This relationship typically represents the historic price movement of a specific security against the movement in the S&p 500. A beta of 1.35 would indicate that the security move 1.35 times the movement in the S&P or 35% greater variability. The S&P 500 is considered having a beta of 1.00. Betas less than 1.00 are considered less variable than the market, betas greater than 1.00 are considered more variable than the market and negative betas are considered as inversely related to the market.

 Beta equation mutual funds: The beta of a fund is determined as follows: [(n) (sum of (xy)) ]-[ (sum of x) (sum of y)] [(n) (sum of (xx)) ]-[ (sum of x) (sum of x)] where: n = # of observations (36 months) x = rate of return for the S&p 500 Index y = rate of return for the fund.

 Beta equation stocks: The beta of a stock is determined as follows:[(n) (sum of (xy)) ]-[(sum of x) (sum of y)][(n) (sum of (xx)) ]-[(sum of x) (sum of x)]where: n = # of observations (24-60 months)x = rate of return for the S&p 500 Index y = rate of return for the stock

 Related Terms
 Difference from s&p
S&p 500
S&p financial strength

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