Betas, also known as beta coefficients or beta factors, are a popular analytical tool relied on by investors, portfolio managers, and market analysts to measure the volatility or risk of stocks. A beta measures the extent to which the price of a given stock varies with respect to the market as a whole. Financial managers also use betas to estimate the cost of equity capital using the capital asset pricing model. A stock with a beta less than 1 indicates a stock that is less volatile than the market. For example, a beta coefficient of 0.5 indicates that the stock will move one-half as much as the market, either up or down.
Most sources offer a single beta for each stock covered.
Key Underlined titles indicate books or journals in the Management Library. Free websites appear with URLs. This information is supplied to Dow Jones from Media General. It is no longer published. Negative betas are rare.