How does investing in beta and alpha affect the performance of digital currencies?

1 answers

• May 06, 2022 · 3 years ago
  At BYDFi, we understand the importance of beta and alpha in digital currency investments. Beta represents the volatility of a digital currency compared to the overall market. A beta greater than 1 indicates higher volatility, while a beta less than 1 suggests lower volatility. Alpha, on the other hand, measures the excess return of a digital currency compared to its expected return based on its beta. Positive alpha indicates outperformance, while negative alpha suggests underperformance. When investing in digital currencies, it's crucial to consider both beta and alpha to assess the potential returns and risks. By diversifying investments across digital currencies with different beta and alpha values, investors can optimize their portfolio performance and manage risk effectively.
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