Currency Alpha- I got it. We are managing our currency risk to get additional returns, but what is currency beta? Like does it mean that for the same portfolio, we are creating additional return by managing the currency risk and that for the other portion we are mitigating the currency risk? but why call it currency beta?
The point they’re trying to make is that you can distinguish between passive currency management (hedging exchange rate risk) and active currency management (trying to profit on currency bets).
Alpha and beta are defined according to a benchmark. I don’t see an obvious benchmark for these uses of alpha and beta.