Beta: The systematic risk indicator
Beta measures how much a stock moves relative to the overall market. A beta of 1 means the stock follows the market; greater than 1, it's more volatile; less than 1, it's more stable.
Beta is a number reflecting a security's sensitivity to market index movements.
Beta doesn't predict the future; it only describes past behavior.
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Frequently asked questions
Is negative beta possible?
Yes, though rare. A negative-beta stock rises when the market falls.
Is beta the only risk that matters?
No. Beta captures only systematic (market) risk.