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Jul 11, 2024 · A beta coefficient shows the volatility of an individual stock compared to the systematic risk of the entire market. Beta represents the slope of the line through a...
The Beta coefficient is a measure of sensitivity or correlation of a security or an investment portfolio to movements in the overall market.
In finance, the beta (β or market beta or beta coefficient) is a statistic that measures the expected increase or decrease of an individual stock price in proportion to movements of the stock market as a whole. Beta can be used to indicate the contribution of an individual asset to the market risk of a portfolio when it is added in small quantity.
Jun 8, 2023 · What Is Beta? Beta (β) measures a stock's volatility or the degree to which its price fluctuates relative to the market as a whole. A benchmark index is chosen to represent the market in the beta calculation.
Oct 6, 2023 · Beta coefficient measures an asset's volatility or systematic risk compared to the overall market. A higher beta indicates higher returns and higher risk, while a lower beta suggests more stable returns.
May 6, 2024 · 6 Steps to Calculate the Beta of a Stock. Here is a straightforward formula for calculating the Beta Coefficient of a Stock: Obtain the stock’s historical share price data. Obtain historical values of a market index, e.g., S&P 500.
The beta coefficient can be interpreted as follows: β =1 exactly as volatile as the market; β >1 more volatile than the market; β <1>0 less volatile than the market; β =0 uncorrelated to the market; β <0 negatively correlated to the market; Here is a chart illustrating the data points from the β calculator (below): Examples of Beta
May 16, 2024 · Explore Beta, a fundamental tool used to measure a stock's volatility compared to the overall market. Understand its calculation and uses.
Jan 1, 2021 · The beta is the number that tells an investor how risky a stock is compared to most other stocks. Here's a guide to beta and what it means.
Sep 18, 2022 · The beta coefficient is calculated by dividing the covariance of the stock return versus the market return by the variance of the market. Beta is used in the calculation of the capital asset ...
