I've been investing in stocks for a while, but there's one concept I'm still not clear about. I often hear the term 'beta' in relation to stocks, but I don't fully understand what it means. Could someone explain what beta is in the context of stock investing?
6
answers
amelia_harrison_architect
Thu Feb 27 2025
When a stock has a beta value exceeding 1.0, it signifies that its price movements are more pronounced than those of the overall market.
Lucia
Thu Feb 27 2025
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BlockchainMastermind
Thu Feb 27 2025
This higher beta implies greater volatility, meaning the stock is likely to experience larger swings in price both upwards and downwards.
KpopHarmonySoulMate
Thu Feb 27 2025
Conversely, a beta below 1.0 indicates that the stock is less volatile compared to the broader market.
CherryBlossomBloom
Thu Feb 27 2025
Such stocks tend to exhibit more muted price movements, experiencing smaller increases and decreases in value.