NexusFi: Find Your Edge


Home Menu

 



Beta

A measure of a stock's (financial instrument) risk of volatility compared to the overall market. The market's beta coefficient is 1.00. Any stock with a beta higher than 1.00 is considered more volatile than the market, and therefore riskier to hold, whereas a stock with a beta lower than 1.00 is expected to rise or fall more slowly than the market.
In strict percentage terms, a stock with a beta of 0.75 is likely to rise or fall 0.75 per cent if the market rises or falls 1.00 per cent. Low beta stocks are also called defensive stocks because investors like to hold them when the market is on a downtrend or is particularly volatile. High beta stocks tend to be favoured when the market is rising steadily and investors are happy to take greater risks in order to maximise returns.

Source: https://www.ft.com

See also:
https://en.wikipedia.org/wiki/Beta_(finance)
https://www.investopedia.com/terms/b/beta.asp
https://financial-dictionary.thefreedictionary.com/Beta


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top