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Alpha and beta are two terms that get thrown around a lot in investing. ... This means that a $1,000 investment in the S&P 500 at the beginning of 1965 would have been worth about $308,000 at the ...
Beta measures the contribution of an individual investment to the risk of the market portfolio that was not reduced by diversification. It does not measure the risk when an investment is held on a stand-alone basis. The beta of an asset is compared to the market as a whole, usually the S&P 500.
Beta is a way of measuring a stock’s volatility compared with the overall market’s volatility. ... when making investment decisions. Using beta to evaluate a stock’s risk ...
Beta is simply one measure of the risk of how a stock trades. The Bottom Line A stock’s beta doesn’t tell investors exactly how it is going to trade, but it is a good gauge of how volatile it ...
β, Beta, is the measure of asset sensitivity to a movement in the overall market; Beta is usually found via regression on historical data. Betas exceeding one signify more than average "riskiness" in the sense of the asset's contribution to overall portfolio risk; betas below one indicate a lower than average risk contribution.
Alpha is a measure of the active return on an investment, the performance of that investment compared with a suitable market index. An alpha of 1% means the investment's return on investment over a selected period of time was 1% better than the market during that same period; a negative alpha means the investment underperformed the market.
The beta value of a stock is Some investors see volatile prices as an opportunity to score big gains. Others prefer sticking with the less exciting but less dangerous alternative: stable stocks ...
For an investment that involves risk to be worthwhile, its returns must be higher than a risk-free investment. The risk is related to volatility. 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.