When it comes to portfolio and performance analysis it is essential that investors understand the key performance metrics. Two important measures which are often used in fund or portfolio analysis are alpha and beta. Both measures are derived from the Capital Asset Pricing Model (CAPM), which was introduced in the early- to mid-1960s and are calculated based on the past performance of a portfolio. Despite these similarities, alpha and beta offer different insights into the risk and return characteristics of a portfolio.   Beta: A Measure of Market Risk (Systematic Risk) Beta measures a portfolios sensitivity to market movements, the