What does beta mean in the stock market?

Beta is a way of measuring a stock’s volatility compared with the overall market’s volatility. The market as a whole has a beta of 1. Stocks with a value greater than 1 are more volatile than the...

What does beta mean in stock?

What Is A 'Beta' In Stocks? Stock "beta" is a statistical measure that compares the volatility of returns on a specific stock to those of the market as a whole. It is an important indicator of the risk and opportunity of an individual stock and is widely used by investors.

What is the formula for beta of a stock?

Stock Beta Formula = COV (Rs,RM) / VAR (Rm) Here, Rs refers to the returns of the stock. Rm refers to the returns of the market as a whole or the underlying benchmark used for comparison. Cov( Rs, Rm) refers to the covariance Covariance Covariance is a statistical measure used to find the relationship between two assets and is calculated as the ...