InsiderFlow › Glossary › What is a stock's beta?
Beta measures how much a stock amplifies market moves: a beta of 1.5 means when the index gains 1%, the stock tends to gain 1.5%.
A beta of 1 means the stock moves like the market; above 1 it's more nervous (typical of tech and cyclicals), below 1 more defensive (utilities, consumer staples). Tesla's beta long exceeded 2; Coca-Cola's often sits below 0.6.
It's used to build portfolios: mixing high- and low-beta stocks tunes how much your portfolio dances with the market. It doesn't, however, measure company-specific risk.
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No, it's a choice: it amplifies gains in rallies and losses in selloffs. It depends on your profile.
Not entirely: it shifts with the business and market conditions, and needs updating.