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.
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