AFIN - Company Financial Ratios

β > 1 - means that the variability of the return on investment in a particular stock is higher than the return on investment in the stock index.

0 < β < 1 - means that the variability of the return on investment in a particular stock is lower than the return on investment of the stock index.

β = 0 - means almost complete independence of the behavior of a particular stock from the entire market. We can say that the stock behaves neutral in relation to the market.

β < 0 - indicates that the market and the stock move in different directions. And when we hear that a stock is going against the market, it means that its beta is negative.

Stocks with β > 1 can be called aggressive stocks. They grow faster than the market, but they also fall more strongly. Stocks ranging from 0 to 1 have moderate risk parameters. The β coefficient close to zero indicates a low risk of the instrument.

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