Beta
By Sitraka Forler · Lecturer, Durham Business SchoolUpdated 13 September 2026 About this site
A measure of a stock's sensitivity to market movements.
A beta of 1.5 means the stock moves 1.5× the market. Beta > 1 is amplified market risk; Beta < 0 is countercyclical. It is estimated by regressing stock returns against index returns.
Example
Beta = Cov(stock, market) / Var(market)