what does a negative alpha mean in stocks 
a negative alpha in stocks means that a stock is underperforming the benchmark when adjusted for risk if an investor is intending to match or outperform a specific benchmark and their investment portfolio is performing under that rate then their alpha is negative the bottom linethe goal of an investor is to achieve the highest returns possible alpha is a measure of performance regarding investment returns that are better when compared to a benchmark when adjusted for risk active investors seek to achieve returns that are higher than a benchmark and can employ a variety of strategies to do so many funds such as hedge funds have the purpose of achieving alpha and charge high management fees for doing so 