Beta
Definition
A measure of a stock's volatility relative to the overall market. A beta of 1 means the stock moves with the market. A beta greater than 1 means more volatile; less than 1 means less volatile. A beta of 0 means no correlation.
Related Terms
Alpha
A measure of an investment's performance relative to a benchmark index. Positive alpha means the investment outperformed the benchmark; negative alpha means it underperformed. A fund with an alpha of 2 returned 2% more than its benchmark.
Volatility
A statistical measure of the dispersion of returns for a given security or market index. High volatility means large price swings; low volatility means stable prices. The VIX index measures expected volatility of the S&P 500.
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