Beta & Volatility Risk
Analyze stock volatility relative to the market using Beta and CAPM.
CAPM Variables
S&P 500 Beta = 1.0
The Capital Asset Pricing Model (CAPM) describes the relationship between systematic risk and expected return. Higher beta means higher risk, demanding higher potential returns.
Expected CAPM Return
12.75%
Above Average Volatility
Market Premium
5.50%
Correlation
Moves with Market
Beta (Risk) Spectrum
Volatility Warning
A beta of 1.5 means the stock is 50% more volatile than the S&P 500. If the market drops 10%, expect this stock to drop roughly 15%.
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