What is Beta Coefficient?

Answer Posted / hasanain ali

f any asset has a beta coefficient of 1, it carries
approximately the same volatility as the relevant market
benchmark. Betas above 1 imply that the asset is more
volatile, while those below 1 tell us that the security
moves less than the overall market index.

For US assets, a particular stock's Beta Coefficient
typically measures its volatility against the S&P 500 index.
For example, if stock XYZ typically moves 5 percent for
every 1 percent change in the S&P 500, it carries a beta
coefficient of 5.
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