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Top 100 Low Beta Stocks List 2022: Lowest Beta S&P 500 Stocks

In the world of investing, volatility matters. Investors are reminded of this every time there is a downturn in the broader market and individual stocks that are more volatile than others experience enormous swings in price.

Volatility is a proxy for risk; more volatility generally means a riskier portfolio. The volatility of a security or portfolio against a benchmark is called Beta.

In short, Beta is measured via a formula that calculates the price risk of a security or portfolio against a benchmark, which is typically the broader market as measured by the S&P 500.

Here’s how to read stock betas: – 1.0 means the stock moves equally with the S&P 500 – 2.0 means the stock moves twice as much as the S&P 500 – 0.0 means the stocks moves don’t correlate with the S&P 500 – -1.0 means the stock moves precisely opposite the S&P 500

The Evidence for Low Beta Outperformance

Beta is helpful in understanding the overall price risk level for investors during market downturns in particular.

The lower the Beta value, the less volatility the stock or portfolio should exhibit against the benchmark.

How To Calculate Beta

The formula to calculate a security’s Beta is fairly straightforward. The result, expressed as a number, shows the security’s tendency to move with the benchmark.

Here’s a look at the formula: β(beta) =

Cov(RaRb)

Var (Rb)

___________

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