Stocks that drop dramatically when the market falls are those with high betas. The food industry is a low beta industry. The expectations about future cash flows of high technology are high when the economy is in a period of expansion, growth and development but low when it contracts. The relationship between the returns of the security and the market factor can be seen by plotting market returns on one axis and the returns for one company over the same period on the other. For virtually all stocks in the economy, this relation will be positive.
Most securities have some degree of positive exposure to bull and bear market cycles.
In fact, we quantify this exposure by the slope of the regression line estimated from this graph. The steeper the slope, the more systematic risk, the shallower the slope, the less exposed the company is to the market factor. In fact, the coefficient quantifies the expected return for the stock, depending upon the actual return of the market. For instance, consider a company with a beta of 1.5. In practice, this is the way that a company's beta is measured, and consequently, this is how the discount rate is estimated.