A picture of the “betafication” of alpha

CAPM / Alpha Theory 29 Jul 2008

The commoditization of alpha has been a recurring theme on these pages (see, for example, “Alpha – once beatified, now beta-fied“).  We came across the graphic below in a recent presentation given by Andrew Lo to the Society for Financial Econometrics in June.  The presentation was called “What will happen to the quants in August 2017?”.  But this particular slide sums up the inextricable evolution from alpha to beta. 

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