I'm fairly new to finance, and this does not make sense to me.
Consider benchmark & active monthly returns as shown here:
If I do a line of best fit, I get an intercept of 8.4%
Which is meant as the alpha of the active strategy.
However, if I do a cumulative multiplication of benchmark returns (eg. 1.03 * 1.06 * ... *1.03) vs active (1.06 * 1.02 * ... * 1.01) I get benchmark total returns of 214.6% vs 225.8% - ie. a delta of ~11%.
I can't get my head around the relationship between the 11% and the 8.4% from the linear regression.
EDIT: Fixed some arithmetic mistakes.