Most investors look at returns.
Better investors look at relative performance.
A stock can rise 10% and still underperform the market. GrabAlpha shows you the difference.
The problem
A stock going up doesn't always mean it performed well
Say a stock rises 10%. On its own, that looks like a win. But if the S&P 500 gained 20% over the same period, that 10% gain underperformed the market by 10 percentage points.
Both went up — but holding the index would have doubled the gain. Absolute returns hid that.
The right yardstick
Why benchmarks matter
A benchmark isn't a competitor.
It's a measuring stick.
Performance only means something relative to a benchmark — and the right benchmark changes the story. A semiconductor stock might look strong against the broad market, yet weak against the semiconductor sector itself.
Compare against the broad market to ask "did it beat stocks in general?" — or against a sector to ask "is it a leader among its peers?"
The toolkit
What GrabAlpha shows
GrabAlpha helps separate stock-specific performance from market-driven gains. Three views tell the story:
Normalized returns
Stock and benchmark both indexed to the same start, so you can see at a glance which pulled ahead.
Excess return (alpha)
The gap between the two, plotted around zero. This shows how the stock performed relative to the benchmark.
Drawdown
How far the stock fell from its peak. Two stocks can produce similar returns while exposing investors to very different levels of downside risk.
Reading the chart
How to interpret excess return
The excess-return line is the heart of GrabAlpha. Reading it is simple:
- Above zerothe stock is outperforming the benchmark.
- Below zerothe stock is lagging the benchmark.
- Risingit is gaining relative strength right now.
- Fallingit is losing relative strength, even if the price is still going up.
The payoff
Why this helps investors
- Understand market-driven gains. Separate the skill from the rally, so you know what you're really being paid for the risk.
- Identify leaders. Find the stocks driving their own gains, not just riding a rising tide.
- Avoid laggards. Spot names that look fine in isolation but quietly trail the market.
Myth vs. reality
Common misconceptions
“My stock is up, so it's doing well.”
Not necessarily. If the benchmark gained more over the same period, the stock may have underperformed despite positive returns.
“The benchmark doesn't matter.”
Performance is relative. A 15% gain looks very different when the market gained 5% versus 25%.
“Alpha is only for professional investors.”
Relative performance is useful for any investor comparing a stock against alternatives.
“A stock that fell must have performed poorly.”
Not always. If the benchmark fell more, the stock may have shown relative strength despite a negative return.