what a beta is in security marketing?

Answer Posted / archit agrawal

Beta in the market measures the risk which cannot be diversified. Normally when you invest in the market you bear two types of risk, systemic risk & diversifiable risk. By being diversified, we can remove one type of risk, but we can't remove systemic risk.

Therefore Beta measure the risk which cannot be diversified.

Beta also measures the correlation between the stock price & stock market.

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