Beta (Stock Volatility)

Beta measures how much a stock moves relative to the overall market (typically the S&P 500). A beta of 1.5 means the stock historically moves 1.5% for every 1% move in the market. It's a key metric for understanding portfolio risk.

• Beta = 1.0 — Moves in line with the market.
• Beta > 1.0 — More volatile. Amplifies both gains and losses (tech, growth stocks).
• Beta < 1.0 — Less volatile. Dampens market moves (utilities, consumer staples).
• Beta < 0 — Moves opposite to the market (rare — gold miners sometimes exhibit negative beta).
• Portfolio beta — Weighted average of all position betas. Tells you overall market sensitivity.