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Beta coefficient |
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Definition of Beta coefficientBeta coefficientA measurement of the extent to which the returns on a given stock move with stock market.
Related Terms:Security market lineLine representing the relationship between expected return and market risk. Security Market LineA graph illustrating the equilibrium relationship between the Market RiskThe part of security's risk that cannot be eliminated by diversification. It is measured by the beta coefficient. Beta (Mutual Funds)The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means Beta equation (Mutual Funds)The beta of a fund is determined as follows: Beta equation (Stocks)The beta of a stock is determined as follows: Coefficient of determinationA measure of the goodness of fit of the relationship between the dependent and Correlation coefficientA standardized statistical measure of the dependence of two random variables, Country betaCovariance of a national economy's rate of return and the rate of return the world economy Expected return-beta relationshipImplication of the CAPM that security risk premiums will be Foreign market betaA measure of foreign market risk that is derived from the capital asset pricing model. Fundamental betaThe product of a statistical model to predict the fundamental risk of a security using not Information Coefficient (IC)The correlation between predicted and actual stock returns, sometimes used to Leveraged betaThe beta of a leveraged required return; that is, the beta as adjusted for the degree of Unleveraged betaThe beta of an unleveraged required return (i.e. no debt) on an investment when the Zero-beta portfolioA portfolio constructed to represent the risk-free asset, that is, having a beta of zero. BetaA measure of the riskiness of a specific security compared to the Correlation CoefficientA measure of the tendency of two variables to change values coefficient of correlationa measure of dispersion that indicates the degree of relative association existing between two variables coefficient of determinationa measure of dispersion that coefficient of variationa measure of risk used when the standard deviations for multiple projects are approximately input-output coefficienta number (prefaced as a multiplier BetaThe price volatility of a financial instrument relative to the price Correlation coefficientA statistic in which the covariance is scaled to a betaSensitivity of a stock’s return to the return on the market Beta riskRisk of a firm measured from the standpoint of an investor who holds a highly diversified portfolio.
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