Static Testing: A form of software testing where the software isn't actually used it checks mainly for the sanity of the code, algorithm, or document. It is used by the developer who wrote the code. 89. Stability Testing: Testing technique which attempts to determine if an application will crash.
Before we start, you'll need to understand a few key terms and concepts, namely alpha, beta, systematic risk and idiosyncratic risk. Beta - The return generated from a portfolio that can be attributed to overall market returns. Exposure to beta is equivalent to exposure to systematic risk. The alpha is the portion of a portfolio's return that cannot be attributed to market returns, and is thus independent from market returns.
These are all statistical measurements used in modern portfolio theory (MPT). All of these indicators are intended to help investors determine the risk-return profile of an investment. Portfolio managers seek to generate alpha in diversified portfolios with diversification intended to eliminate unsystematic risk.