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Beta can be used to indicate the contribution of an individual asset to the market risk of a portfolio when it is added in small quantity. It refers to an asset's non-diversifiable risk, systematic risk, or market risk. Beta is not a measure of idiosyncratic risk. Beta is the hedge ratio of an investment with respect to the stock market.
Beta is an important measure of one type of risk, but it doesn’t encapsulate all of a stock’s risk. Stocks are shares of real-life businesses , which subjects them to the economic fortunes of ...
Beta, or the beta coefficient, measures volatility relative to the market and can be used as a risk measure. By definition, the market always has a beta of 1, so betas above 1 are considered more ...
Beta: Beta measures the sensitivity of an investment’s returns to market returns. A beta greater than one indicates higher volatility than the market, while a beta less than 1 suggests lower ...
Volatility does not measure the direction of price changes, merely their dispersion. This is because when calculating standard deviation (or variance), all differences are squared, so that negative and positive differences are combined into one quantity. Two instruments with different volatilities may have the same expected return, but the ...
A measure of the factors influencing an investment's volatility is the beta. The beta is a measure of the risk arising from exposure to general market movements as opposed to idiosyncratic factors. A beta below 1 can indicate either an investment with lower volatility than the market, or a volatile investment whose price movements are not ...
The beta (β) of a stock or portfolio is a number describing the volatility of an asset in relation to the volatility of the benchmark that said asset is being compared to. This benchmark is generally the overall financial market and is often estimated via the use of representative indices , such as the S&P 500 .
Anyone researching Roxgold Inc (TSE:ROXG) might want to consider the historical volatility of the share price. Modern finance theory considers volatility to be a measure of risk, and there are ...