![]() Negative β: A company with a negative β is negatively correlated to the returns of the market. As an example, consider an electric utility company with a β of 0.45, which would have returned only 45% of what the market returned in a given period. Low β: A company with a β that’s lower than 1 is less volatile than the whole market. For example, a high-risk technology company with a β of 1.75 would have returned 175% of what the market return in a given period (typically measured weekly). High β: A company with a β that’s greater than 1 is more volatile than the market. ![]() β The beta coefficient can be interpreted as follows: A company with a higher beta has greater risk and also greater expected returns. It is used as a measure of risk and is an integral part of the Capital Asset Pricing Model (CAPM). a stock) is a measurement of its volatility of returns relative to the entire market. The beta (β) of an investment security (i.e.
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