| A measurement of the movement of the price of a particular stock compared with the movement of the market as a whole over the same period. If a stock has a beta value of less than 1, it is regarded as low risk and if it has a beta of more than 1, it is regarded as more risky, but there is a greater chance that it will outperform the market. Low beta stocks are generally known as defensive stocks, such as food retailers, and high beta stocks are more cyclical, in sectors such as consumer durables. Betas are usually plotted on a scatter diagram which shows the movement of the market as a whole and the return on a particular stock daily, weekly, monthly or quarterly. Note that betas for any individual company do change, so you can't rely on historical betas as a guide to future betas, and a stock's beta varies according to the direction of the market - some stocks are riskier in a falling market.
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