Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Beta Coefficient
Conclusion
FAQs
Risk exposure and correlation with the general market trends
QUIZ
Beta Coefficient
What is it?
E(Ri)
Rf
[E(Rm) - Rf]
E(Ri) = Rf + βi [E(Rm) - Rf]
βi
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Beta (β) is used to measure how volatile and how risky a stock is. It is a measurement of how volatile a stock is relative to the overall stock market, usually as measured by the S&P 500 index. If a stock has a beta of two, and the market falls 10%, the stock would, theoretically, fall 20%
Conclusion
FAQs
The higher beta is, the more market risk there is in the stock.
QUIZ
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
PROS
Beta Coefficient
What is it?
Used in CAPM formula
Easy to understand
Useful for assessing a portfolio
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
Backward-looking
Volatile metric
Only measures systematic risk
CONS
QUIZ
Beta Coefficient
What is it?
Now that you know the concept of beta and how to get the list of high volatility stocks, you may be wondering if you should invest in these stocks. Well, the answer solely depends on two factors:
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
Your risk tolerance and return expectation
Your experience in stock markets
QUIZ
Beta Coefficient
What is it?
There you go! By now, you may have understood what is a high beta stock, its merits and demerits, and whether you should invest in it or not. You also know how to get the list of high-volatility stocks using Tickertape Stock Screener. Be mindful of not basing your investment decisions on the beta of a stock alone. Ensure to look at more than just the beta value. Evaluating the company’s internal management and conducting fundamental and technical analysis of the stock is equally important.
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
Beta coefficient (β): A measure of a stock's volatility compared to the overall market. It indicates how sensitive a stock's price is to changes in the market index.
Volatility: A statistical measure of the dispersion of returns for a security or market index. It represents the degree of variation of a financial instrument's price over time.
Systematic risk: The risk inherent to the entire market or market segment, also known as market risk or non-diversifiable risk. It cannot be eliminated through diversification.
Unsystematic risk: The risk specific to an individual stock or industry, also known as company-specific risk or diversifiable risk. It can be reduced or eliminated through diversification.
Covariance: A measure of how two variables, such as stock returns and market index returns, move together. Variance: A statistical measure of the dispersion of a set of data points, such as the returns of a market index. It helps quantify the risk associated with the index.
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
BETA COEFFICIENT
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Transcript
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Beta Coefficient
Conclusion
FAQs
Risk exposure and correlation with the general market trends
QUIZ
Beta Coefficient
What is it?
E(Ri)
Rf
[E(Rm) - Rf]
E(Ri) = Rf + βi [E(Rm) - Rf]
βi
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Beta (β) is used to measure how volatile and how risky a stock is. It is a measurement of how volatile a stock is relative to the overall stock market, usually as measured by the S&P 500 index. If a stock has a beta of two, and the market falls 10%, the stock would, theoretically, fall 20%
Conclusion
FAQs
The higher beta is, the more market risk there is in the stock.
QUIZ
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
PROS
Beta Coefficient
What is it?
Used in CAPM formula
Easy to understand
Useful for assessing a portfolio
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
Backward-looking
Volatile metric
Only measures systematic risk
CONS
QUIZ
Beta Coefficient
What is it?
Now that you know the concept of beta and how to get the list of high volatility stocks, you may be wondering if you should invest in these stocks. Well, the answer solely depends on two factors:
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
Your risk tolerance and return expectation
Your experience in stock markets
QUIZ
Beta Coefficient
What is it?
There you go! By now, you may have understood what is a high beta stock, its merits and demerits, and whether you should invest in it or not. You also know how to get the list of high-volatility stocks using Tickertape Stock Screener. Be mindful of not basing your investment decisions on the beta of a stock alone. Ensure to look at more than just the beta value. Evaluating the company’s internal management and conducting fundamental and technical analysis of the stock is equally important.
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ
Beta coefficient (β): A measure of a stock's volatility compared to the overall market. It indicates how sensitive a stock's price is to changes in the market index. Volatility: A statistical measure of the dispersion of returns for a security or market index. It represents the degree of variation of a financial instrument's price over time. Systematic risk: The risk inherent to the entire market or market segment, also known as market risk or non-diversifiable risk. It cannot be eliminated through diversification. Unsystematic risk: The risk specific to an individual stock or industry, also known as company-specific risk or diversifiable risk. It can be reduced or eliminated through diversification. Covariance: A measure of how two variables, such as stock returns and market index returns, move together. Variance: A statistical measure of the dispersion of a set of data points, such as the returns of a market index. It helps quantify the risk associated with the index.
Beta Coefficient
What is it?
Its interpretation
How to calculate
The pros and cons
High beta stocks?
Conclusion
FAQs
QUIZ