Question on being Beta Neutral

Discussion in 'Strategy Building' started by Sky123987, Jan 11, 2008.

  1. Sky123987

    Sky123987

    I'm trying to go LONG on SKS and short on WMT and be Beta Neutral.

    This is what I thought Beta was... if you have a Beta of 1.5 you take (1.5 - 1 ) / 1 which = .5, so for every move in the market the stock moves 50% more. Is that correct?


    According to yahoo.com the beta of WMT is 0.05 and the Beta of SKS is 1.18.

    So for every move in the market SKS moves 18% more and what does WMT move??? 1/20? of the market??? I doubt that.

    Could someone help me?

    Thanks
     
    #1     Jan 11, 2008
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