AMERICAN BALANCED Total Risk Alpha
| BALCX Fund | | | USD 39.89 0.49 1.24% |
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 AMERICAN BALANCED's current Total Risk Alpha with peer comparisons and related risk metrics.
Current Total Risk Alpha Value
The Total Risk Alpha of 0.0753 for AMERICAN BALANCED indicates positive alpha — return above what market exposure alone would predict. AMERICAN BALANCED has generated modest excess return beyond what its systematic risk exposure explains.
Total Risk Alpha | = | RFR + (ER[b] - ER[a]) | x | STD[a] / STD[b] |
| = | 0.0753 | |
| ER[a] | = | Expected return on investing in AMERICAN BALANCED |
| ER[b] | = | Expected return on market index or selected benchmark |
| STD[a] | = | Standard Deviation of returns on AMERICAN BALANCED |
| 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 -0.05 for Total Risk Alpha, with AMERICAN BALANCED at 0.0753 falling above that level. Readings span -0.0984 (Invesco Global Health) to 0.0392 (Tekla World Healthcare). AMERICAN BALANCED 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 American Balanced 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.
AMERICAN BALANCED's Maximum Drawdown of
2.98 runs about
39.53 times its Total Risk Alpha of
0.08 . This indicates Maximum Drawdown substantially exceeds Total Risk Alpha for AMERICAN BALANCED.
Methodology, Assumptions & Data Sources
The current Total Risk Alpha for AMERICAN BALANCED is 0.0753. Total Risk Alpha for AMERICAN BALANCED 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. Indicator accuracy depends on data continuity across the calculation period. Gaps in trading history may affect the output.
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