Beta

technical

Beta measures the volatility of a stock or fund relative to the overall market (typically the S&P 500, which has a beta of 1.0). A beta greater than 1.0 indicates higher volatility than the market, while a beta below 1.0 indicates lower volatility. For example, a stock with a beta of 1.3 is expected to move 30% more than the market in either direction. Beta is calculated using historical returns over a specific period.

Related Terms

Maximum Drawdown Sharpe Ratio Volatility

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