Alpha measures outperformance against the benchmark index per same unit of risk. Here are some examples to illustrate how Alpha is calculated.

Say, the index delivered 10% return and had a maximum drawdown of -10%.

Example 1 : Your investment delivered 20% return and had a maximum drawdown of -10% during the same period. Then your portfolio's alpha is 2X. I.e: it has outperformed the index by 2 times.

Example 2 : Your investment delivered 20% return and had a maximum drawdown of -5% during the same period. Then your portfolio's alpha is 4X. I.e: it has outperformed the index by 4 times.

Example 3 : Your investment delivered 20% return and had a maximum drawdown of -40% during the same period. Then your portfolio's alpha is 0.5X. I.e: it has underperformed the index and has only delivered half the return per same unit of risk.