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Beta compares a stock's price movements to the market (usually S&P 500). A beta of 1.0 means the stock moves with the market; above 1.0 is more volatile, below 1.0 is less.
A beta of 1.5 suggests the stock moves 50% more than the market. A beta of 0.5 suggests it moves half as much.
Beta is useful for understanding systematic risk but doesn't capture company-specific risks.
Understanding beta helps you make better investment decisions and plan for taxes. Use our check portfolio risk to see how it applies to your situation.
