What is “beta”?
Beta refers to a numeric coefficient that measures the volatility or fluctuations of a stock’s price in relation to the changes in the overall market. It is also referred to as an asset’s systematic risk, market risk or hedge ratio. A stock’s volatility is the amount of uncertainty related to the size of changes in the stock’s value. When volatility is high, the stock’s value is spread out over a higher range. Generally, the S&P 500 benchmark of 1 is used to calculate the beta.