What is the Beta of a Stock?

P/E Ratio
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Sampath Kumar
Employee, India

What is the Beta of a Stock?

Before we're investing in a stock, we not only consider the P/E Ratio, but also the Beta of that particular stock.
Beta is the measurement of how volatile the stock is when compared to the index.
In a nutshell, it can be stated that if a stock's beta is 2, it means that it is two times as volatile as the index.
The earnings and loss will also be twice when compared to the index's.

  Emad Refai
Financial Consultant
 

What is Beta of a Stock? Financial Elasticity

The concept of beta is fairly simple; it's a measure of individual stock risk relative to the overall risk of the stock market.
It's sometimes referred to as financial elasticity or correlated relative volatility.

 

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