A beta of exactly 1 means that a stock, fund, or investment portfolio historically moves with the market, generally defined as the S&P 500. In other words, if the S&P 500 falls by 5%, a stock with a beta of 1 can be expected to do the same, absent any stock-specific catalysts. Beta is a multiplicative factor. A stock with a beta of 2 relative to the S&P 500 goes up or down twice as much as the index in a given period of time. If the beta is -2, then the stock moves in the opposite direction of the index by a factor of two. Beta estimates are based on weekly returns over the past 250 weeks. The market return is measured using the capitalization-weighted S&P 500 index of large-cap stocks . Changes over time in the characteristics of a company which affect the way the its stock price covaries with the overall market become reflected in the time-varying beta estimates. Often referred to as the beta coefficient, beta is an indication of the volatility of a stock, a fund, or a stock portfolio in comparison with the market as a whole.

15 Mar 2019 The meaning of beta in stock market investing refers to the historical volatility of a stock. However, it's important to know about its complexities 

The beta coefficient is calculated by using a regression analysis. If the coefficient is exactly 1, then the stock's volatility matches that of the market. If the coefficient  Equity Beta measures the volatility of the stock to the market i.e. how sensitive is the stock price to a change in the overall market. It compares the volatility 

10 Oct 2019 For the past few years, though, the stock has stayed sleepy and its beta is less than half of the market. Learn more: stock market trading terms.

4 Apr 2016 Cross-equity-market confirmation of the SMP empirical model is thereby on the market portfolio, βi = the portfolio's beta, αi = a fixed term for a  12 Jul 2011 Low beta stocks tend to have lower volatility than the market as a whole; however , the terms “low-beta” and “low-volatility” are not entirely  5 Dec 2019 The Beta is the slope of the 60-month regression line of the percentage price change of the stock relative to the percentage price change 15 Apr 2011 in terms of stock returns. As regards the book to market equity ratio, it has also been concluded that there is a positive relation between the  A stock’s beta or beta coefficient is a measure of a stock or portfolio's level of systematic and unsystematic risk based on in its prior performance. The beta of an individual stock only tells an investor theoretically how much risk the stock will add (or potentially subtract) from a diversified portfolio.

Beta is a measure of a stock's volatility in relation to the overall market. By definition, the market, such as the S&P 500 Index, has a beta of 1.0, and individual 

3 Mar 2020 Some stocks even have negative betas. A beta of -1.0 means that the stock is inversely correlated to the market benchmark as if it were an  Description: Beta measures the responsiveness of a stock's price to changes in the overall stock market. On comparison of the benchmark index for e.g. NSE Nifty  Beta in finance, represented by either the word or the Greek letter β, is a term used to refer to the volatility of a particular investment, such as a stock, meaning how  In the stock market, the word or Greek letter beta is used as a measurement of the riskiness or volatility of a particular investment relative to the market as a  Apple, here as you can see we have a beta of 1.06, so what does that mean? That means that it moves very similar to the stock market especially now that had   Glossary of Stock Market Terms. Clear Search. Browse Terms By Number or 

Bear Market: A bear market is a condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining. Investors anticipate losses as

beta. A mathematical measure of the sensitivity of rates of return on a portfolio or a given stock compared with rates of return on the market as a  That doesn't mean you can't use the concepts of alpha and beta to have a Beta measures how an asset (i.e. a stock, an ETF, or portfolio) moves versus a  4 Dec 2017 three factors, in which the risk-free return of a stock or portfolio market portfolio, the term spread (difference return swap interest of 360 days  20 Dec 2018 Low-Beta Stocks 101. The definition of beta is simple—it compares the volatility, or systemic risk, of a stock to the volatility of the market. In other 

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