Beta
A measure of how strongly a portfolio moves with the broader market, where 1 means in line, above 1 means more volatile, below 1 means more defensive.
Category: Risk Measures
What is Beta?
Beta is the slope from regressing portfolio returns on benchmark returns. It separates market-driven movement from idiosyncratic moves.
Formula
\beta = \frac{Cov(R_p, R_m)}{Var(R_m)}