The reality is equity in a property is only saving the cost of the prevailing mortgage interest rate so that is the real return difference between leverage and equity. (biggerpockets.com)
Table 2 reports monthly return differences for each of the five equity style portfolios, in both expansive policy periods and restrictive policy periods. (aaii.com)
If you make the assumption that the sequence of return differences is normally distributed, you can interpret tracking error in a very meaningful way. (investopedia.com)