Last Updated on September 29, 2025 by Admin
What is it?
The Beta Coefficient (β) is a number that shows how much an investment’s return tends to move compared to the overall market’s return.
What does it measure?
It measures the systematic risk that comes from the overall market movements, not from the company itself.
What does the number mean?
- β = 1: The investment moves in line with the market.
- β > 1: It’s more volatile than the market (moves more than the market).
- β < 1: It’s less volatile than the market (moves less than the market).
- β < 0: It tends to move opposite the market.
Formula
$$ Beta\;Coefficient\;\left( \beta \right)= \frac{E\left(R_{i} \right)-R_{f}}{E\left(R_{m} \right)-R_{f}} $$
Beta (β) Calculator
Beta (β)