Alpha and Beta in an Exposure Based Framework

Posted: 4 Aug 2005 Last revised: 27 May 2015

Date Written: July 17, 2005


This paper proposes a philosophy, which generalises the concepts of alpha and beta in its various forms. We argue that in a generalised form the demarcation is actually one between commoditised and non-commoditised beta exposures. This demarcation changes as the market evolves. We further discuss the implications of this framework for active investment processes and the conceptual understanding of portable alpha strategies and risk management.

Keywords: alpha, beta, CAPM, exposure, risk, strategy, hedge funds, asset class

JEL Classification: G10, G11, G12, G15

Suggested Citation

Gupta, Pranay, Alpha and Beta in an Exposure Based Framework (July 17, 2005). Available at SSRN: or

Pranay Gupta (Contact Author)

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