Beta

A measure of a stock’s risk relative to the market, usually the Standard & Poor’s 500 indexes. The market’s beta is always 1.0; a beta higher than 1.0 indicates that, on average, when the market rises, the stock will rise to a greater extent, and when the market falls, the stock will fall to a greater area. A beta lower than 1.0 indicates that, on average, the stock will move to a lesser extent than the market. The higher the beta, the greater the risk.