Beta

200282932-001Beta is the risk faced by a stock against the usual market fluctuations in a given economy.actually it shows the movement of the stock vis-a-vis a given stock market.It moves between the values of greater than 1 and less than 1.If the stock beta is equal to 1 ,it means that it moves with the market.If the stock beta is more than  1 ,it means that it is more volatile than the market.If the stock beta less than to 1 ,it means that it is less volatile than the market.

According to the analysts,stock with beta greater than 1 are more riskier than stocks with beta less than 1.So this also means that they offer more returns than the less riskier stocks.We can say that investors looking for high returns in less time should invest in stock with beta more than 1.For long term and risk averse  investors ,stock with beta more than 1 has no real attraction.So long term investors should look for the stock with beta less than 1 or equal to 1.

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About Emaad Qureshi