In finance, the process of retrospectively evaluating the efficacy of investment decisions is referred to as attribution.  It's used to ask, "How'd we do?" and offer a granular, objective answer.  Using the risk/reward framework, widely accepted risk factors are used to explain a position's performance. As a cartoon example, let's say you own a share of IBM.  For equities, we'll perform attribution using Beta , roughly speaking a measure of correlation to the underlying market.  If IBM has a Beta of 0.75 and the SnP5000 moved by 2% then Beta predicts that IBM would move by 0.02 * 0.75 = 1.5%.  If instead we observed a measure of 1.7% then we may say that 1.7 - 1.5 = 20bps (basis point = 1/100 of 1%) is due to expert skill aka " alpha ."  Alpha is often used as a remuneration metric for professional portfolio managers. There's actually a whole lot more to attribution but hopefully this example communicates the general intuition.  Interesting...