![]() ![]() Therefore, it will experience higher fluctuations compared to other options on the market. Any number above 1 means that the investment is more volatile than the market. ![]() When this coefficient equals 1, the stock in consideration is exactly as volatile as the market. Investors and companies use beta to compare a stock or security’s market risk to the market.īeta helps investors quantify the systematic risk they face for an investment, represented by the beta coefficient. In that model, it represents the measure of systematic risk for a given security or stock. It is one of the critical parts of the capital asset pricing model (CAPM). Beta is a metric used to measure the systematic risk or volatility of a specific security or investment compared to the market. ![]()
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