The Beta Coefficient is a concept taken from the popular Capital Asset Pricing...
A relative measure of risk, or price volatility, related to a market benchmark (e.g., S&P 500 average). A beta of 1.0 means that for every 1% change in the market, an individual security or investment will likely move 1%. The higher the beta, the greater the risk than that of the market benchmark. A beta, for example, of 1.5 indicates that an investment's returns will likely be 1.5 times as volatile as the general market's returns. A beta of .92, on the other hand, means that an investment would be expected to drop 8% less than that of the benchmark and rise 8% less than the benchmark. A negative beta indicates that an investment is likely to move in the opposite direction of the benchmark.
Used to measure a share's volatility or how much more or less a share's price moves compared with the market as a whole. The greater the beta the greater the sensitivity to market movements generally.
A means of measuring the volatility of an individual market (security, future, financial instrument) in comparison with the market as a whole. A beta of 1 indicates that the individual marketâ€(tm)s price will move with the overall market.
A statistic that measures a stock's volatility in relation to the rest of the market. It is used, in part, with the theory that higher risk offers a better return.
Analysis of a stock's price movement in relation to the rest of the stock market.
The degree of risk which cannot be decreased by diversification. A stock with a beta greater than 1 will rise faster or decline faster than the overall market. A stock with a beta lower than 1 will rise slower or decline slower than the overall market.
The beta coefficient is a measure of a stock's volatility and is provided by Zacks Investment Research. A company with a beta of less than 1.0 has below average volatility, and vice versa.
A measure of the volatility of a stock relative to the overall market. Beta is calculated by applying linear regression, the security's week-to-week percent price change to the correlating index's week-to-week percent change for a given period of time. A beta value of 1.1 indicates a 1.10-% movement for a 1% move in the index, regardless of direction.
Measure of the sensitivity of an asset to market conditions; it is the relevant risk measure for calculating an asset's required rate of return.
Relates the volatility of a stock or portfolio to the market as a whole
The Beta coefficient is a key parameter in the Capital asset pricing model (CAPM). It measures the part of the asset's statistical variance that cannot be mitigated by the diversification provided by the portfolio of many risky assets, because it is correlated with the return of the other assets that are in the portfolio.
