Beta


What is Beta?

Measure of the volatility, or systematic risk of a given portfolio or security measured in comparison to the market.

In simple terms beta is the tendency of a security or portfolio to respond to swings in the market. A beta of 1 means that it will move in pairty with the market, while lower than 1 indicates that it will be less volatile than the market. A beta of more than 1 indicates a security will have more volatility than the market.

A portfolio with a 1.4 beta is, 40% more volatile than the market.