If market rises by 100% then the stock rises by 120%
Beta measures a stock's volatility (the swings up and down in price). The market as a whole has a beta of 1.0, but each stock is determined a beta value from a history of it's stock movements. Riskiness equates to the stock losing value and high beta stocks are more prone to falling faster.
49%....in reality no stock has a beta of 7
beta is a useless metric. It measures volalotilty. Which a serious investor won’t care about because it just gives them the price to buy more at a cheaper price and a investor knows the instricic value of a stock.
Check out these websites: http://faculty.babson.edu/academic/Beta/CalculateBeta.htm http://www.money-zine.com/Investing/Stocks/Stock-Beta-and-Volatility/
E (return) = Rf + Beta[Rm - Rf] = 6 + (7) (13-6) = 55 %
Beta is a measure of a stock's volatility. The price of a stock with a beta of 1.0 rises and falls on average with the overall market. A beta greater than 1.0 could mean larger prices fluctuations, and a beta of less than 1.0 indicates a more tame stock. For example, if Company A has a beta of 1.2 and the market goes up 10% in a given period of time then Company A should increase about 12% in value. If the market falls 20% then Company A's stock price should drop 24%.
The Beta of a stock is always dynamic.
Beta measures a stock's volatility (the swings up and down in price). The market as a whole has a beta of 1.0, but each stock is determined a beta value from a history of it's stock movements. Riskiness equates to the stock losing value and high beta stocks are more prone to falling faster.
To calculate the portfolio beta by weighting individual stock's betas, you would multiply each stock's beta by its weight in the portfolio, and then sum up these values to get the overall portfolio beta.
Beta is a number that describes how the volatility of a stock varies with a nominated benchmark index. It's the covariance of the stock with respect to the index divided by the variance of the index. The related link contains more information
You can use Beta to measure market volatility because of beta is the elasticity of a stock change as a result of a change in the market. That is, Beta of a sotck is found by comparing the senstivity of a stock's return to the fluctuations in the market.Beta is found by dividing the product of the covwariances of the stock and market retun by the variance of the market.The bench marks of betas are as followed:a risk free investment such as a Tbill (that is guaranteed a return) will have a beta of 0.A portfolio with risk equivalent to the market has a beta of 1.Given those two bench mark, you can gauge at the volatility of the stock/investment by comparing its beta with those two extremes.
The beta of a firm's stock is dependent on the volatility of the stock relative to the overall market. So if the stock's volatility increased relative to the overall market, it's beta would increase as well.
A beta of 1 indicates that the security's price will move with the market.
Look up Bombay Stock Exchange www.bseindia.com and Nantional Stock Exchange www.nseindia.com for beta values of Indian companies.
49%....in reality no stock has a beta of 7
In finance, a beta number measures the volatility or risk of a stock relative to the overall market. A beta greater than 1 indicates that the stock is more volatile than the market, while a beta less than 1 suggests the stock is less volatile. It helps investors assess the potential risk and return of a particular investment.
beta is a useless metric. It measures volalotilty. Which a serious investor won’t care about because it just gives them the price to buy more at a cheaper price and a investor knows the instricic value of a stock.