Glossary
Practical definitions for the terms you see in Quantory.
| Term | Definition | Why it matters |
|---|---|---|
| Alpha | Return above a benchmark after adjusting for risk. | Helps separate skill from market exposure. |
| Beta | Sensitivity of an asset or portfolio to market moves. | Shows how much risk comes from broad market swings. |
| Sharpe Ratio | Risk-adjusted return using volatility as the risk proxy. | Compares strategies with different risk levels. |
| Volatility | How much returns fluctuate around the average. | Higher volatility means a wider range of outcomes. |
| Max Drawdown | Largest peak-to-trough decline in a period. | Highlights worst-case loss you might have endured. |
| Correlation | Measure of how two assets move together. | Lower correlation improves diversification. |
| Rebalancing | Adjusting weights to target allocations over time. | Keeps risk profile consistent as prices move. |
| Tracking Error | Volatility of the return difference versus a benchmark. | Quantifies how closely you follow a reference index. |