Beta (finance)/Definition: Difference between revisions
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In finance, a measure of the degree to which rate of return of a share tracks that of the equity market as a whole (defined as the ''covariance'' (qv) between the share's rate of return and the average market rate, divided by the ''variance'' (qv) of the market rate). If beta = 1 the share's rate of return moves in line with the market rate; if it is negative, it falls when the market rate rises. | |||
Revision as of 06:16, 1 March 2008
In finance, a measure of the degree to which rate of return of a share tracks that of the equity market as a whole (defined as the covariance (qv) between the share's rate of return and the average market rate, divided by the variance (qv) of the market rate). If beta = 1 the share's rate of return moves in line with the market rate; if it is negative, it falls when the market rate rises.