Beta
What is “Beta”?
Beta is a measure of a stock's or portfolio's sensitivity to changes in the overall market. It quantifies the relationship between the price movements of a particular asset and the broader market as a whole. Beta is a statistical measure that indicates the volatility or systematic risk of an investment relative to a benchmark. For investments in the United States, this benchmark is typically the S&P 500 index. For other countries, the relevant local indices are provided below.
The beta coefficient is calculated by regressing the historical returns of the asset against the historical returns of the benchmark index.
Here's what different beta values signify:
- Beta = 1: A beta of 1 indicates that the asset tends to move in line with the market. If the market goes up or down by a certain percentage, the asset's price is expected to move in the same direction by a similar percentage.
- Beta > 1: A beta greater than 1 suggests that the asset is more volatile or sensitive to market movements than the overall market. If the market increases by a certain percentage, the asset's price is expected to increase by a higher percentage, and vice versa.
- Beta < 1: A beta less than 1 implies that the asset is less volatile or less sensitive to market movements compared to the overall market. If the market goes up or down by a certain percentage, the asset's price is expected to move in the same direction but by a lower percentage.
- Beta = 0: A beta of 0 indicates no correlation between the asset and the market. The asset's price movements are independent of market movements.
- Negative Beta: A negative beta means that the asset's price tends to move in the opposite direction of the market. If the market goes up, the asset's price is expected to decrease, and vice versa. Negative beta is often associated with assets that exhibit defensive or countercyclical characteristics.
Beta is widely used by investors, portfolio managers, and analysts as a risk assessment tool. It provides insights into the asset's volatility relative to the market and helps investors understand the potential risks and returns associated with an investment. Assets with higher betas are generally considered riskier but may also offer the potential for higher returns.
Country | Local Index |
---|---|
Argentina | ARGENTINA MERVAL |
Australia | AUSTRALIA ASX ALL ORDINARIES |
Austria | AUSTRIA ATX |
Bahrain | BAHRAIN ALL SHARE |
Bangladesh | BANGLADESH DSE ALL SHARE |
Belgium | BELGIUM BEL-20 |
Botswana | BOTSWANA DOMESTIC COMPANIES(DCI) |
Brazil | BRAZIL BOVESPA |
Bulgaria | BULGARIA BG 40 INDEX |
Canada | CANADA S&P/TSX COMPOSITE |
Chile | CHILE IPSA |
China | CHINA SHANGHAI SE COMPOSITE |
Colombia | COLOMBIA IGBC |
Croatia | CROATIA CROBEX |
Cyprus | CYPRUS CSE ALL SHARE |
Czech Republic | CZECH(REP OF) PX-50 |
Denmark | DENMARK OMXC 20 |
Egypt | EGYPT EGX 30 |
Estonia | ESTONIA OMXT (EUR) |
Finland | FINLAND HEX GENERAL |
France | FRANCE CAC 40 |
Germany | GERMANY DAX(TR) |
Ghana | GHANA GSE ALL-SHARE |
Greece | GREECE ATHEX COMPOSITE |
Hong Kong | HONG KONG HANG SENG |
Hungary | HUNGARY BUX |
Iceland | ICELAND OMX ICELAND ALL-SHARE |
India | INDIA BSE SENSEX(BSE30) |
Indonesia | INDONESIA JSX COMPOSITE |
Iran | IRAN TEPIX |
Ireland | IRELAND ISEQ OVERALL |
Israel | ISRAEL TA-100 |
Italy | FTSE ITALIA MIB |
Ivory Coast | IVORY COAST BRVM COMPOSITE |
Jamaica | JAMAICA JSE MARKET |
Japan | JAPAN TOPIX |
Jordan | JORDAN GENERAL |
Kazakhstan | KAZAKHSTAN KASE |
Kenya | KENYA NSE |
Korea | KOREA KOSDAQ COMPOSITE |
Kuwait | KUWAIT KSE |
Latvia | LATVIA OMXR (LVL) |
Lithuania | LITHUANIA LITIN |
Luxembourg | LUXEMBOURG LUXX |
Malaysia | MALAYSIA KLSE COMPOSITE |
Malta | MALTA MSE SHARE |
Mauritius | MAURITIUS SEMDEX |
Mexico | MEXICO (UTD MEX ST) IPC |
Morocco | MOROCCO MASI |
Namibia | NAMIBIA FTSE/JSE NSX OVERALL |
Netherlands | NETHERLANDS AEX INDEX |
New Zealand | NEW ZEALAND NZX 50(GRS) |
Norway | NORWAY OSE OBX |
Oman | OMAN MSM 30 INDEX |
Pakistan | PAKISTAN KSE 100 |
Palestine | PALESTINE AL-QUDS |
Peru | PERU BVL GENERAL |
Philippines | PHILIPPINES PSEI |
Poland | POLAND WIG(TR) |
Portugal | PORTUGAL PSI GENERAL |
Qatar | QATAR QE INDEX |
Romania | ROMANIA BET |
Russia | RUSSIA RTS |
Saudi Arabia | SAUDI ARABIA TADAWUL ALL SHARE INDEX |
Scotland | FTSE UK ALL-SHARE(GBP) |
Serbia | BELEX15 BELGRADE INDICES |
Singapore | FTSE ST STRAITS TIMES INDEX |
Slovak Republic | SLOVAKIA(REP OF) SAX |
Slovenia | SLOVENIA (REP OF) SBITOP |
South Africa | SOUTH AFRICA FTSE/JSE ALL SHARE |
South Korea | KOREA KOSPI COMPOSITE |
Spain | SPAIN IBEX 35 |
Sri Lanka | SRI LANKA CSE ALL SHARE |
Sweden | SWEDEN OMXS 30 |
Switzerland | SWITZERLAND SMI |
Taiwan | TAIWAN TAIEX |
Thailand | THAILAND SET |
Trinidad & Tobago | TRINIDAD & TOBAGO TTSE ALL T&T |
Tunisia | TUNISIA TUNIS BVM GENERAL |
Turkey | TURKEY ISE NATIONAL 100 |
UAE - Dubai | UTD ARAB EMIRATES DFM INDEX |
UAE - NASDAQ Dubai | FTSE NASDAQ UAE 20 |
UAE - Abu Dhabi | ABU DHABI ADSM GENERAL INDEX |
Ukraine | UKRAINE PFTS |
United Kingdom | FTSE UK ALL-SHARE(GBP) |
United States | S&P 500 INDEX |
Venezuela | VENEZUELA IBC GENERAL |
Vietnam | VIETNAM VN |
Zambia | ZAMBIA LUSE ALL SHARE |
Zimbabwe | ZIMBABWE ZSE INDUSTRIAL |