Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM).
 | | Term of the Day | Words to Know | | |  | | Beta | | A beta coefficient is a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market. In statistical terms, beta represents the slope of the line through a regression of data points from an individual stock's returns against those of the market. | | Read More » | | Capital Asset Pricing Model | | The Capital Asset Pricing Model is a model that describes the relationship between risk and expected return, helping in the pricing of risky securities. | | Read More » | | | R-Squared | | R-squared is a statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable. | | Read More » | | | Alpha | | Alpha (α) , used in finance as a measure of performance, is the excess return of an investment relative to the return of a benchmark index. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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