beta greater than 1

Discussion in 'Strategy Development' started by dice216, Aug 20, 2007.

  1. dice216

    dice216

    what is the significance of a stock having a beta greater than 1? anybody?
     
  2. It means that the stock is more volatile than the overall market.

    For example, if a stock had a beta of 2, it would tend to move twice as much as the index. So, if the S&P 500 rose 5%, the stock with a beta of 2 would be expected to rise 10%. That goes for the downside as well.