DEFINITION of 'Market Proxy'
A broad representation of the overall market. A market proxy is chosen and used to simplify studies that require a market variable, statistic or comparison. The market proxy, once selected, is then used in performance evaluations and studies, or to test a hypothesis.
INVESTOPEDIA EXPLAINS 'Market Proxy'
Finding a true proxy (or reflection) of the market as a whole may not be possible, because a proxy will only be a fragment of the entire market for all risky assets. As well, every proxy for the market would need to be unique, according to what is being traded or measured. For example, the S&P 500 could be used as a market proxy when evaluating the excess returns of a fund manager only using stock from the S&P 500. A different proxy would be needed, however, to assess a manager trading in futures or using fixedincome arbitrage.

Excess Returns
Investment returns from a security or portfolio that exceed a ... 
Alpha
1. A measure of performance on a riskadjusted basis. Alpha takes ... 
Alpha Generator
Any security that, when added to an existing portfolio of assets, ... 
Capital Asset Pricing Model  CAPM
A model that describes the relationship between risk and expected ... 
Proxy
1. An agent legally authorized to act on behalf of another party. ... 
Beta
A measure of the volatility, or systematic risk, of a security ...

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