CAPM Beta

CAPM Beta measures a stock’s sensitivity to overall market movements. If the market goes up or down, Beta indicates how much the stock is likely to move in response. A Beta of 1 suggests the stock moves in line with the market. A Beta greater than 1 means the stock is more volatile—its price swings are larger than the market’s. A Beta less than 1 indicates the stock is less volatile. It's a tool investors use to assess the risk of a stock relative to the broader market and to help determine expected returns.