Have you ever wonder why some stocks seem to fall a more when the index is down as compared to others? Or why is it when an index is up say 1%, a stock can be rising more than 1%?
With modern day technology, this can be numerically calculated through an indicator known as the Beta (β) of a stock.
Beta refers to the volatility of a stock in response to the overall changes in the market. (Market being a benchmark index such as STI or S&P500)
What is BETA (β)?
Beta refers to the volatility of a stock in response to the overall changes in the market. It is measured as a single digit. (Usually 1 , 0.9 , 1.5 etc.)
A stock with the beta of 1 would indicate that theoretically, the stock is as volatile as the market itself. If the stock has a beta measurement of 0.9...