mdi-chevron-left Go Back


Measure of a stock's market volatility.

Business Glossary provided by
Beta is a measure of a stock's volatility in comparison to the overall market. A stock with a beta higher than 1 is considered more volatile than the market, and conversely, a beta lower than 1 indicates less volatility than the market. Investors use beta to understand investment risk and to calculate the expected rate of return in accordance with the Capital Asset Pricing Model (CAPM). A stock's beta is important in the portfolio construction process, where it is used to build a balanced portfolio in terms of risk exposure.
View Glossary Writing a Business Plan?

Starting or Running a Business?

Generate a business plan in minutes.

Get Started
Business Owner