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Beta

Beta

Parent term
Technical Indicator

Beta measure how much a stock moves compared to an index it is part of (commonly the S&P 500)

  • Most paid and free quoting services (like google finance) will quote Beta for you automatically (compared to S&P 500)


Simple Beta Example:

  • Assume the S&P 500 Goes up by 1% in a day
  • Assume an individual stock (MSFT) goes up 2% in a day
  • The Beta of MSFT would be 2.0 (2% / 1%)

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