Which beta is better?

A beta greater than 1 indicates that the stock is more volatile than the market, and therefore considered a high beta stock. A beta of less than 1 indicates that the stock is less volatile than the market, and a beta of 1 indicates that the stock's volatility is the same as the market's volatility.

Which beta is the best?

A beta greater than 1.0 suggests that the stock is more volatile than the broader market, and a beta less than 1.0 indicates a stock with lower volatility.

What is the best beta for a stock?

A beta above 1.0 means the stock will have greater volatility than the market, and a beta less than 1.0 indicates lower volatility. Volatility is usually an indicator of risk, and higher betas mean higher risk, while lower betas mean lower risk.

Is a beta of 2 good?

Say a company has a beta of 2. This means it is two times as volatile as the overall market. We expect the market overall to go up by 10%. That means this stock could rise by 20%.

Is a beta of less than 1 good?

Beta Value Less Than One

A beta value that is less than 1.0 means that the security is theoretically less volatile than the market. Including this stock in a portfolio makes it less risky than the same portfolio without the stock.

Understanding Beta | Investopedia

What if my beta hCG is less than 1?

An hCG level of less than 5 mIU/mL is considered negative for pregnancy, and anything above 25 mIU/mL is considered positive for pregnancy. An hCG level between 6 and 24 mIU/mL is considered a grey area, and you'll likely need to be retested to see if your levels rise to confirm a pregnancy.

Is a beta above 1 risky?

High beta stocks, also known as volatile stocks, are those that have a beta of greater than 1, indicating that they are more volatile than the overall market. These stocks are considered to be riskier than the market average, but also have the potential for higher returns.

What is a normal beta for a stock?

Stocks with a beta of less than 1 have a smoother ride as their moves are more muted than the market's, but they'll usually still go up when the market goes up and down when the market goes down. Securities with a negative beta, which is unusual, will typically move inversely to the market.

Is a beta of 1.5 high?

A beta value of 1.5 indicates that the price of the stock is more volatile than the market. In fact, it is assumed to be 50% more volatile than the market. Tech stocks and small caps tend to have high betas.

What is a strong beta?

A standardized beta coefficient compares the strength of the effect of each individual independent variable to the dependent variable. The higher the absolute value of the beta coefficient, the stronger the effect. For example, a beta of -. 9 has a stronger effect than a beta of +. 8.

What is Amazon's beta?

Amazon Beta Analysis

Amazon's Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of an equity instrument to the financial market in which this instrument is traded.

Do you want a high or low-beta?

Stocks with a beta above 1 tend to be more volatile than their index, while stocks with lower betas tend to be less volatile. High-beta stocks tend to increase a portfolio's overall volatility and low-beta stocks tend to decrease it. However, beta is a backward-looking metric which only measures one kind of risk.

What is high beta stocks?

High beta stocks generate returns that are significantly higher than the prevailing inflation rate in the country. This implies that the real value of a total investment will rise, indicating a significant rise in the purchasing power of individual investors.

What does a beta of 2 mean?

A beta of 2 means that the stock moves twice as much as the market. A beta of 0 means that the stock does not move with the market. The beta of the market is the average beta of all stocks in the market.

Is negative beta good?

An investment with zero beta means no volatility, like cash. A negative beta correlation would mean an investment that moves in the opposite direction from the stock market. When the market rises, then a negative-beta investment generally falls.

Is a beta of 1.2 risky?

Beta, which measures an asset's volatility and can be used to gauge risk, can be used in determining expected return. If a stock has a beta of 1.2, it might be considered 20 percent riskier than the benchmark and therefore should compensate investors with a higher expected return.

Is a beta of .5 good?

A beta lower than one suggests that a stock is less risky than the market. A beta of . 5 suggests that the stock is 50% less volatile than the market. Adding this type of stock to a portfolio lowers the overall risk but has a similar effect on potential return.

Why invest in high beta stocks?

A beta of more than 1.0 means that the stock is more volatile than the overall market and a beta less than 1.0 indicates lower volatility than the benchmark index. Thus, stocks with higher betas tend to gain more in bull markets but also plummet harder in bear markets.

Is low beta good for a stock?

The lower the Beta value, the less volatility the stock or portfolio should exhibit against the benchmark. This is beneficial for investors for obvious reasons, particularly those that are close to or already in retirement, as drawdowns should be relatively limited against the benchmark.

What is considered a low beta stock?

A stock that has a market value above 1.0 is considered high-beta, whereas a stock with a market value lower than 1.0 is considered as low-beta. The beta, in any market across the world, is 1.0.

What does a stock beta of 1.5 mean?

Roughly speaking, a security with a beta of 1.5, will have move, on average, 1.5 times the market return. [More precisely, that stock's excess return (over and above a short-term money market rate) is expected to move 1.5 times the market excess return).]

What is a good P E ratio?

To give you some sense of what average for the market is, though, many value investors would refer to 20 to 25 as the average P/E ratio range.

What does a beta of 0 mean?

A zero-beta portfolio is a portfolio constructed to have zero systematic risk, or in other words, a beta of zero. A zero-beta portfolio would have the same expected return as the risk-free rate.

What does beta of 1.3 mean?

The market is described as having a beta of 1. The beta for a stock describes how much the stock's price moves compared to the market. If a stock has a beta above 1, it's more volatile than the overall market. For example, if an asset has a beta of 1.3, it's theoretically 30% more volatile than the market.