Alpha

Return above what the risk taken would have delivered through simple market exposure.

Take a portfolio returning 18.4% with a beta of 1.1, against a market return of 14% and a risk-free rate of 7%. It produced 3.7 points of alpha, the part that market exposure alone wouldn't have given you.

Alpha depends entirely on the model used to define expected return, so the same track record can show alpha under one specification and none under another. Adding factors for size, value and momentum has historically explained away much of what looked like skill.

Alpha measured over a short period is mostly noise. Fifteen years is the horizon at which the question becomes answerable.