Beta
It is a standard measure of risk for an individual stock. It is the sensitivity of movement of past share price of stock to the movement of market as a whole. The beta of market is taken as 1. A benchmark index [the Sensex, for instances] is taken as the proxy for market.
Stocks with betas greater than 1 tend to amplify the movement of market. If a stock has a beta of 1.20, it means that if the market has moved by 1%, the stock price would have moved by an extra 1.2%. |
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