Reply To: Beta coefficient
manveena
Beta coefficient measures the market systematic risk of shares.
When beta is one, the return on the share changes at the same rate as the average return on the market.
When the coefficient is two, the investment risk is greater and the return varies so that the average is double the return on the market.
If beta is under one, the share has a lower risk and changes on the market have on average a smaller impact on the return.
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So basically the more the beta, the more volatile the share price is?
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I don’t think it comments about the share price. I guess, beta talks about the returns only.
Do let me know if I’m wrong!
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