Beta
A measure of how much an asset tends to move compared with the overall market.
In plain English
A measure of how much an asset tends to move compared with the overall market.
Beta compares an asset's swings to a benchmark. A beta of 1 moves in step with the market. A beta of 1.5 tends to move 50% more, both up and down. A beta of 0.5 moves half as much.
High-beta assets feel thrilling in rallies and brutal in sell-offs. Beta is calculated from the past, and past relationships can break. Its partner idea is alpha.
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