Finance Coefficient Beta
Beta: A Key Risk Measure in Finance
Beta (β) is a crucial concept in finance, serving as a measure of a security’s, or portfolio’s, volatility relative to the overall market. It quantifies how much the price of an asset tends to fluctuate compared to the fluctuations of a broad market index, such as the S&P 500. In simpler terms, beta helps investors understand the systematic risk, also known as market risk, associated with an investment.