Alpha is the intercept of the characteristic line of a stock's returns versus those of the market.
A stock return is a long-term increase or decrease in the value of an asset or investment. A positive return indicates that the investment was profitable. A negative return indicates that the investment has lost money.
The point where the function crosses the y-axis is known as the intercept and is frequently denoted as a constant. In some analyses, removing the intercept and reducing the regression line to Y = bX + error causes the regression model to only become significant.
The vertical intercept, or alpha, reveals how much better the fund performed than was anticipated by the CAPM (or maybe more typically, a negative alpha tells you how much worse it did, probably due to high management fees). The statistic r-squared indicates the accuracy of the fit.
To know more about intercept refer to: https://brainly.com/question/17253383
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