Beta

How to find high beta stocks

How to find high beta stocks

Finding beta of a stock using formula

  1. Get the historical prices for the desired stock.
  2. Get the historical prices for the comparison benchmark index.
  3. Calculate % change for the same period for both the stock and the benchmark index. ...
  4. Calculate the Variance of the stock.
  5. Find the covariance of the stock to the benchmark.

  1. How do you find the beta of a stock?
  2. Is High beta good for a stock?
  3. What number is considered a high beta?
  4. What does a beta of 0.8 mean?
  5. Is Apple a high beta stock?
  6. What is the best beta for a stock?
  7. Is 1.5 A high beta?
  8. Is Amazon a high beta stock?
  9. How do you find the beta and alpha of a stock?
  10. What does a beta of 1.05 mean?

How do you find the beta of a stock?

Beta could be calculated by first dividing the security's standard deviation of returns by the benchmark's standard deviation of returns. The resulting value is multiplied by the correlation of the security's returns and the benchmark's returns.

Is High beta good for a stock?

A stock that swings more than the market over time has a beta above 1.0. If a stock moves less than the market, the stock's beta is less than 1.0. High-beta stocks are supposed to be riskier but provide higher return potential; low-beta stocks pose less risk but also lower returns.

What number is considered a high beta?

A high-beta stock, quite simply, is a stock that has been much more volatile than the index it's being measured against. A stock with a beta above 2 -- meaning that the stock will typically move twice as much as the market does -- is generally considered a high-beta stock.

What does a beta of 0.8 mean?

If the stock is more volatile than the market, its beta will be more than 1, and if it is less volatile than the market, its beta will be less than 1. For example, a stock with a beta of 0.8 would be expected to return 80% as much as the overall market.

Is Apple a high beta stock?

In accordance with the recently published financial statements, Apple Inc has a Beta of 1.2. This is 13.21% higher than that of the Technology sector and 42.86% higher than that of the Consumer Electronics industry. The beta for all United States stocks is notably lower than that of the firm.

What is the best beta for a stock?

Stocks with a value greater than 1 are more volatile than the market (meaning they will generally go up more than the market goes up, and go down more than the market goes down). Stocks with a beta of less than 1 have a smoother ride as their moves are more muted than the market's.

Is 1.5 A high beta?

A high beta (greater than 1.0) indicates moderate or high price volatility. A beta of 1.5 forecasts a 1.5% change in the return on an asset for every 1% change in the return on the market.

Is Amazon a high beta stock?

Despite its successes, the company remains open to competitors as well as razor-thin profit margins. The company's stock has a beta of around 1.3 and trailing P/E ratio of 138x, making it still a highly speculative investment fueled by anticipation of even greater growth ahead.

How do you find the beta and alpha of a stock?

Alpha = R – Rf – beta (Rm-Rf)

R represents the portfolio return. Rf represents the risk-free rate of return. Beta represents the systematic risk of a portfolio. Rm represents the market return, per a benchmark.

What does a beta of 1.05 mean?

A beta greater than one indicates greater volatility than the overall market, and a beta less than one indicates less volatility than the benchmark. If, for example, a fund has a beta of 1.05 in relation to the S&P 500, the fund has been moving 5% more than the index.

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