The name “Spotalpha” is a play on words Spot (which means to find) and Alpha. “Alpha” is a term used in the financial industry to refer to an investment’s ability to outperform the market, and it’s often considered an indicator of the skill of a fund manager or investor. Spotalpha’s goal is to help self-directed investors not just make a profit but to outperform the majority investors and fund managers in the market.
Spotalpha employs the scale and unbiased qualities of AI to provide algorithm-based quantitative analysis that is more dependable and accessible to investors.
Here’s an example of how Spotalpha helps investors outperform in their investments. In the image shown below, Spotalpha’s peak risk is marked by the orange arrow while NIFTY-50’s peak risk is marked by the red arrow and the difference in return is highlighted by the green arrow.
During the period 1-Jan-2016 to 13-Jun-2023, Spotalpha’s India market Mid-Cap Alpha Portfolio delivered 724% return while experiencing a peak risk (fall from peak to trough) of -12.5%. During the same period, the NIFTY-50 benchmark delivered 135% while experiencing a peak risk (fall from peak to trough) of -38.44%. The outperformance or Alpha can be calculated as ( (1+7.24)/(0.125) ) / ( (1+1.35)/(0.3844) ) which results in 10.8. I.e: Spotalpha’s Indian market Mid-Cap Alpha Portfolio investors outperformed NIFTY-50 by approx. 11 times.
In conclusion, Spotalpha’s name stands for what it aims to achieve, which is to help investors significantly outperform the market.