Stock Market
Intermediate
Beta
💡 In plain English: Measures how much a stock moves relative to the market — beta >1 means it's more volatile than Nifty.
Definition
A measure of a stock's sensitivity to market movements. A beta of 1.5 means the stock tends to move 1.5x the market's move.
📌 Real-World Example
Stock A has beta = 1.4. Nifty falls 10% → Stock A likely falls ~14%. Nifty rises 10% → Stock A likely rises ~14%. Gold ETF has beta ≈ 0 (doesn't move with market).
🔢 Formula
Beta = Cov(Stock Returns, Market Returns) / Var(Market Returns)
Related Terms
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