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 | | Beta is a measure of the volatility–or systematic risk–of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks). CAPM is widely used as a method for pricing risky securities and for generating estimates of the expected returns of assets, considering both the risk of those assets and the cost of capital. | | Read More » | | SPONSORED BY INVESCO | | The Complete Guide to ETFs | | ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. | | Learn 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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