Weighted Alpha

The leader of the pack, the alpha dog, eats first after a kill. After a while, they can get kind of chunky. Weighted alpha.

The term "alpha," in stock trading terms, refers to the change in price of a stock. The goal of alpha is usually to see how well an investment performed compared to a particular benchmark. So if you invested in a mutual fund, you might compare the gains that fund obtained with those of the S&P 500 index. The gains above what you could have made in a vanilla S&P 500 bet represent the alpha you're interested in.

Weighted alpha puts more attention on recent moves. The figure usually takes into account an investment's movement over a year, with more recent activity getting more, well...weight.

The equation that produces the weighted alpha figure puts more emphasis on recent movements in the investment. If a stock rose from $40 to $60 over the course of the year, but $19 of the $20 in gain happened 10 months ago, it might not mean much in terms of the stock's future.

You're looking at a stock that gained 50% in a year, at least technically, but closer inspection shows a stock that rose $19 very fast in two months and has been basically flat for the past 10 months. Weighted alpha will take this into account.