Alternative beta refers to a type of beta that captures the sensitivity of an investment’s returns to factors other than the traditional market risk factors typically associated with equities. In finance, beta is a measure of a security's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility than the market, while a beta less than 1 indicates lower volatility. Alternative beta, however, is often associated with alternative investment strategies, such as hedge funds or private equity.
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