Investment Dictionary

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Investment Dictionary - Beta

A number that compares the volatility (movement or fluctuation) of a stock's price to that of the total market. A beta of 1 means that a stocks price moves up and down at the same rate as the market as a whole. A beta higher than 1 indicates moderate to high price volatility. For example, a beta of 1.5 forecasts a 1.5 percent change in the return on an asset for every 1 percent change in the total market. High-beta stocks are best to own in a bull market and are the worst to own in a bear market.

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