|A stock’s Beta is a measurement of how volatile it is compared to the rest of the overall market. |
Stocks with a Beta of 1 tend to move in-line with the broader markets, while stocks with a Beta below one tend to move less than the average market.
Conversely, if a stock’s Beta is greater than 1, it is implied to be more volatile & risky than the general market. Despite their above-average risk, stocks with a higher Beta do provide better potential returns than safer, less volatile stocks with Beta values that are less than one.