Arun_K_Bhaskar

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
Release Notes: Update v1.1
Added up or down arrows which indicates whether the value is increasing or decreasing compared to the previous value
Release Notes: Updated position.
Release Notes: Updated text alignment and text position.
Release Notes: Converted from label to table view.
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Want to use this script on a chart?

Comments

Can't see values
+1 Reply
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.
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Arun_K_Bhaskar rameshvisva
@rameshvisva, there is an ontion in it.
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I also can't see any values
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@Dyna8620, Zoom out the chart.
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Dyna8620 Arun_K_Bhaskar
@Arun_K_Bhaskar, I've done that in every way, but nothing shows
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@Dyna8620, if your index is different change it. The position issue is fixed. Change the text color to light if it is dark theme.
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