What is the Beta of a Stock?




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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.
 
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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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