definition of beta stocks
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Definition of 'Beta' Definition of 'Beta'. Tweet. Beta is a numeric value that measures the fluctuations of a stock to changes in the overall stock market. Definition: Beta is a numeric value that measures the fluctuations of a stock to changes in the overall stock market. Description: Beta measures the responsiveness of a stock's price to changes in the overall stock market. On comparison of the benchmark index for e.g.
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beta test Part of the Software development glossary: In software development, a beta test is the second phase of software testing in which a sampling of the intended audience tries the product out. (Beta is the second letter of the Greek alphabet.) Originally, the term alpha test meant the first phase of testing in a software development process.
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What Does Beta Mean in Finance? - TheStreet Definition Dictionary of Financial Terms. This volatility measure is supposed to give you some sense of how far the fund will fall if the market takes a dive and how high the fund will rise if the bull starts to climb. A fund with a beta greater than 1 is considered more volatile than the market; less than 1 means less volatile. So say your fund gets a beta of 1.15 -- it has a history of fluctuating 15% more than the S&P. If the market is up, the fund should outperform by 15%. If the market heads lower, the fund should fall by 15% more. Problem: For funds that don't correlate well to the S&P, beta just doesn't tell you much.
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Stocks with a Negative Beta Also, exchange-traded funds that focus on “shorting” stocks can have negative betas. Shorting a stock is speculating that the stock’s price will go down. Since these types of exchange-traded funds profit when the market drops, it makes sense that they would have a negative beta.
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Why is BETA important when making investment decisions? Answer Wiki. 1 Answer. Beta is a measure of a stock's volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0.
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What is 'Beta' Loading the player... Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which calculates the expected return of an asset based on its beta and expected market returns.
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What is 'Beta' A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security's price is theoretically more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market. Conversely, if an ETF's beta is 0.65, it is theoretically 35% less volatile than the market. Therefore, the fund's excess return is expected to underperform the benchmark by 35% in up markets and outperform by 35% during down markets.
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beta What It Is. Beta is a measure of a stock's volatility relative to the overall market. It is most often calculated using a stock's movements relative to the S&P 500 Index over the trailing 12-month period.
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The 5 Types of Volatility Investors have developed a measurement of stock volatility called beta. It tells you how well the stock price is correlated with the S&P 500 Index. If it moves perfectly along with the Index, the beta will be 1.0. Stocks with betas that are higher than 1.0 are more volatile than the S&P 500.
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Beta Beta. Beta is a measure of an investment's relative volatility. The higher the beta, the more sharply the value of the investment can be expected to fluctuate in relation to a market index. For example, Standard & Poor's 500 Index (S&P 500) has a beta coefficient (or base) of 1.eta. Beta is a measure of an investment's relative volatility. The higher the beta, the more sharply the value of the investment can be expected to fluctuate in relation to a market index. For example, Standard & Poor's 500 Index (S&P 500) has a beta coefficient (or base) of 1.
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- Beta Quote Analyst Report Chart Shareholders Financials Insiders Performance Key Stats Valuation Filings
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Beta (finance) To estimate beta, one needs a list of returns for the asset and returns for the index; these returns can be daily, weekly or any period. Then one uses standard formulas from linear regression. The slope of the fitted line from the linear least-squares calculation is the estimated Beta. The y-intercept is the alpha.
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- While standard deviation is a measure of. absolute volatility that shows how much an investment’s return varies from its average. return over time, beta is a measure of relative volatility that indicates the price variance of. an investment compared to the market as a whole.
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Alpha and Beta: CNBC Explains It's a mathematical estimate of the return, based usually on the growth of earnings per share. Beta, on the other hand, is based on the volatility—extreme ups and downs in prices or trading—of the stock or fund, something not measured by alpha. But beta, too, is compared to a benchmark, like the S&P 500. You can think of beta as the tendency of a security's returns to respond to swings in the market.
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What is 'Beta' Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns.
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Beta decay In nuclear physics, beta decay (β-decay) is a type of radioactive decay in which a beta ray (fast energetic electron or positron), and a neutrino are emitted from an atomic nucleus.
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Definitions &Translations beta(Noun) A beta fish, of the genus Betta. beta(Noun) A beta male. beta(Verb) To preliminarily release computer software for initial testing prior to final release. beta(Verb) To proofread a text, especially fan fiction. beta(Adjective) Identifying a molecular position in an organic chemical compound.
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beta test In software development, a beta test is the second phase of software testing in which a sampling of the intended audience tries the product out. Beta is the second letter of the Greek alphabet. Originally, the term alpha test meant the first phase of testing in a software development process. The first phase includes unit testing, component testing, and system testing. Beta testing can be considered pre-release testing..
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Definition of 'Beta' Definition of 'Beta' Definition: Beta is a numeric value that measures the fluctuations of a stock to changes in the overall stock market. Description: Beta measures the responsiveness of a stock's price to changes in the overall stock market.
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- a murderous rampage (chiefly US) Rioters were/went on a rampage, looting shops and setting fires. = (chiefly Brit) Rioters were/went on the rampage. [+] more examples [-] hide examples [+] Example sentences [-] Hide examples
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What is the difference between beta and correlation coefficient? A beta of 1 means that the stock responds to market volatility in tandem with the market, on average. A larger beta means that the stock is more susceptible to market risk while a beta less than 1 means that the stock is less responsive to market risk. Beta values are not bounded like the correlation coefficient.
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What is âbetaâ? What is ‘beta’? No, we’re not talking about the second letter of the Greek alphabet, the protein conformation, nor the test used in computer programming. As investors, when we’re talking about beta, we’re talking about risk. Beta is simply a measure of how a particular stock’s price moves relative to the market as a whole. Usually, analysts use it to measure the volatility of a stock, AKA the likelihood that its value will change dramatically over a short period of time.
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- A stock with a negative beta must have a negative required rate of return. c. If a stock’s beta doubles its required rate of return must double. d. If a stock has a beta equal to 1.0, its required rate of return will be unaffected by changes in the market risk premium.
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- A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market. beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market.
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- 0 %. Beta Beta is a volatility measurement of a stock mutual fund or ETF versus a comparable benchmark like the S&P 500 stock index. A stock fund or ETF with a higher beta than the S&P 500 will rise or fall to a greater degree.
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Alpha (finance) Alpha is a measure of the active return on an investment, the performance of that investment compared to a suitable market index. An alpha of 1% means the investment's return on investment over a selected period of time was 1% better than the market during that same period, an alpha of -1 means the investment underperformed the market. Alpha is one of the five key measures in modern portfolio theory: alpha, beta, standard deviation, R-squared and the Sharpe ratio.