Beta

Beta is the measure of risk or volatility of a stock or a portfolio compared to a benchmark or index fund that represents the entire market. The beta will indicate if the investment is more or less volatile than the entire market.

Generally, a market portfolio would be represented with an exact beta of 1. A beta below (-1) would mean that the investment has lower volatility than the market or that the investment is not highly correlated with the market movements. A beta greater than 1 would usually indicate that the investment moves up and down with the market and can even magnify those trends.

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