Applied Opt Total Risk Alpha
| AAOI Stock | | | USD 157.55 -20.99 -11.76% |
Total Risk Alpha measures the excess return of an asset after comparing its performance to a benchmark portfolio matched to the same total risk level. Unlike Jensen Alpha, which adjusts for systematic risk (beta) only, Total Risk Alpha accounts for total volatility. Below is Applied Opt's current Total Risk Alpha with peer comparisons and related risk metrics.
Current Total Risk Alpha Value
Applied Opt carries a Total Risk Alpha of 2.37, consistent with strong positive alpha — return materially above what market exposure alone would predict. Applied Opt has generated returns well beyond what its beta-adjusted market risk explains.
Total Risk Alpha | = | RFR + (ER[b] - ER[a]) | x | STD[a] / STD[b] |
| = | 2.37 | |
| ER[a] | = | Expected return on investing in Applied Opt |
| ER[b] | = | Expected return on market index or selected benchmark |
| STD[a] | = | Standard Deviation of returns on Applied Opt |
| STD[b] | = | Standard Deviation of selected market or benchmark |
| RFR | = | Risk Free Rate of return. Typically T-Bill Rate |
Total Risk Alpha Peers Comparison
The peer group averages 0.73 for Total Risk Alpha, with Applied Opt at 2.37 falling above that level. Readings span -0.33 (Daqo New Energy) to 2.79 (MaxLinear). Applied Opt has generated more excess return relative to its market exposure than the peer group average.
Total Risk Alpha Relative To Other Indicators
The chart below plots Total Risk Alpha against Maximum Drawdown for Applied Opt and its peers. Each point represents one equity — position along the horizontal axis shows Total Risk Alpha while the vertical axis shows Maximum Drawdown. Equities that cluster in different quadrants carry distinct risk-return profiles. Use the dropdowns to swap in other indicators for either axis.
At
2.37 for Total Risk Alpha and
73.27 for Maximum Drawdown, Applied Opt's cross-indicator ratio sits almost
30.88 . This indicates Maximum Drawdown substantially exceeds Total Risk Alpha for Applied Opt.
Methodology, Assumptions & Data Sources
The current Total Risk Alpha for Applied Opt is 2.37. Total Risk Alpha for Applied Opt is derived by applying a defined formula to historical price observations, producing a time-series of comparable readings. Price data is sourced from standardized end-of-day feeds across supported exchanges, normalized for corporate actions. Applied Opt operates in the information technology sector, which may exhibit distinct volatility and momentum characteristics relative to the broader market. Values are specific to the selected time horizon and may differ across measurement periods. This indicator does not constitute investment advice.
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