Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...

Beta measures stock volatility relative to the S&P 500 index. Low-beta stocks offer less volatility; high-beta stocks suggest more. Using beta aids in assessing portfolio risk and crafting investment ...

Look up a stock symbol at most sites and you’ll get a number that represents the stock’s beta. This is a statistic that measures the variance of a stock against the overall market. In theory, ...

Correlation coefficients range from -1 to +1, indicating the strength of relationships between variables. Investors use correlation coefficients for portfolio diversification to reduce risk.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...