Using Beta in the Stock Market | Stock Market Tips for Investing and Trading

Beta measures the riskiness of a stock in relation to the entire stock market. Low beta stocks are more stable, while high beta stocks are more dramatic. If a stock has a beta of 1.5 this simply means that the stock is 50% more volatile than the market.

Traders generally want to watch stocks with betas greater than 1, while long-term investors want stocks with betas less than 1.

Remember beta is a historical measure! This means that the number is derived from past data. The past does not always predict the future so beware!

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