Beta
A measure of how much a stock moves relative to the broad market — beta of 1 moves with the market, above 1 is more volatile, below 1 less.
Beta quantifies a security's systematic risk: its sensitivity to overall market movements. A beta of 1.5 implies the stock tends to move 1.5% for every 1% move in the market. It is the slope of a regression of the stock's returns on the market's returns.
Beta is a core input to the Capital Asset Pricing Model and to portfolio hedging. hedgewing.ai computes rolling beta for every ticker and decomposes risk into systematic and idiosyncratic components.
Related terms
Factor Analysis · Value at Risk (VaR)
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