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Confusion on using and interpretting " Beta "


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Confusion on using and interpretting " Beta "

  #1 (permalink)
Memphis,TN
 
 
Posts: 232 since Sep 2010

Confusion on using and interpretting " Beta "

I'm needing some help in making sure that I am using Beta correctly in my stock screenings

I use FINVIZ for a lot of my stock screenings and chart analysis ( One of the best sites I've seen for charts )

On FINVIZ , there's an Option for inputting different readings for Beta , and thus narrowing down stocks that meet this specific Beta criteria

For Instance, you can set the Beta to screen for stocks that only have.... Under 0, 0.5, 1.5, 2
OR
to screen for stocks that only have Beta of .... Over 0 , 0,5, 1 , 1.5, 2 , 2.5 , 3 , 4


My question then boils down to ,
If I set the screener to only show me stocks that have Beats OVER 2 , then exactly what is this saying about these stocks that it shows me ..... that they are 2 times as volatile then the S&P 500 ( the benchmark ) that all stocks Beta are compared against ?

I do understand it ( hopefully correctly ) , that Beta is a measurement of Volatility ?

Thanks everyone for your help

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