Beta (1/5)

Before understanding this term, we must first understand the meaning of a market index. An index, like the Nasdaq Composite or the S&P 500, is a basket of stocks that investors use to assess the movement of the market as a whole. Beta tells us how much the value of stock for a company fluctuates in relation to the entire market (estimated by an index). When the movement of the specific stock is identical to that of the market, beta is equal to 1. A stock that is more stable than the market has a beta below 1; a stock that is less stable than the market has a beta above 1. 

Written by Megan Pontin

Enthusiastic word-collector, avid pancake-consumer, and experienced hammock-lounger. Student at Cornell University.

Comments

Loading…

0

Market Cap (3/5)

Trading Volume (4/5)