• Home
  • Courses
    • NSE Academy Certified Courses
      • Capital Market Analytics
      • Certified Program on Intraday Trading Strategies
      • Advanced Technical Analysis
      • Advanced Options
      • Advanced Algo Trading
      • Advanced Fundamental Analysis
      • Advanced Risk Management
      • Algorithmic Trading & Computational Finance using Python & R
    • TC Courses
      • FSM 1.0
      • FSM 2.0
      • Mentorship Program
  • Learning Center
    • Financial Education
    • IPO Issues
    • Fundamental Analysis
    • Technical Corner
    • Options Corner
    • Risk Management
  • Screener
  • Emerging Leaders
  • Terminal
  • Subscribe
Have any question?
7718989954
info@tradingcampus.in
Seminar on live trading strategy (Seminar on live trading strategy (11th Feb 2023, 11 am)
Login
Trading CampusTrading Campus
  • Home
  • Courses
    • NSE Academy Certified Courses
      • Capital Market Analytics
      • Certified Program on Intraday Trading Strategies
      • Advanced Technical Analysis
      • Advanced Options
      • Advanced Algo Trading
      • Advanced Fundamental Analysis
      • Advanced Risk Management
      • Algorithmic Trading & Computational Finance using Python & R
    • TC Courses
      • FSM 1.0
      • FSM 2.0
      • Mentorship Program
  • Learning Center
    • Financial Education
    • IPO Issues
    • Fundamental Analysis
    • Technical Corner
    • Options Corner
    • Risk Management
  • Screener
  • Emerging Leaders
  • Terminal
  • Subscribe

Risk Management

  • Home
  • Blog
  • Risk Management
  • What is Beta?

What is Beta?

  • Posted by Trading Campus
  • Date April 1, 2017
  • Comments 35 comments

The beta of the stock denotes the volatility of the stock in comparison with the market index usually which is taken to be  1. A  beta lower than 1 indicates that the stock is less volatile as compared to the market ,while a  beta higher than 1  indicates that the stock is more volatile than the market. A beta equal to 1 would indicate that the stock/security is as volatile as the market.

Suppose a stock has a beta of 1.3 ,this would mean numerically that the stock is 30% more volatile than the market . In the same way if the beta of a stock is 0.7 ,this would mean that the stock is 30% less volatile than the stock. Obviously, a beta less than 1 is by all means desired by the investors of the stocks.

Beta is a measure of the systematic risk of a portfolio (also known as the market risk ) and is not diversifiable since it is an uncertainty prevalent in the entire market segment. It is not limited to a particular business but is widespread across industries. It is the volatility or fluctuations in the price of the stocks on a day to day, monthly, yearly or even on a seasonal basis.

Such type of volatility can’t be avoided as it is always unforeseen ,and it can’t even be predicted with certainty .The best way to exemplify systematic risk is the unpredictable recession periods, like the great recession that hit the world (majorly USA ) in 2008.Such volatility can’t be avoided by methods such as diversification of stocks in the portfolio to counter or minimize the risk inherent in the  portfolio of stocks. The ways to minimize this type of risk /volatility is hedging the risk by proper risk management or by deploying the right kind of asset allocation strategies.

Another method that could effectively work here is that asset classes are spread into stocks and bonds so that when the price of one falls , the price of the other one rises due to the changes in the interest rates ( since the relation between prices of stocks and bonds in inverse ). Other factors affecting beta might be the unforeseen contingencies like wars ,nuclear disasters, emergency ,floods, inflation risk that affects the entire economy overall and not just one sector.

In theory, beta is used (along with the risk free rate ),  to calculate the market risk in the CAPITAL ASSET PRICING MODEL THEORY ,called the CAPM .It is generally considered that higher the risk,higher is the return !

  • Share:
author avatar
Trading Campus
We provide courses in Share Market Training certified by NSE Academy. Get Adequate knowledge through our classroom courses.

Previous post

VALUE AT RISK
April 1, 2017

Next post

Liquidity Risk
April 4, 2017

You may also like

Arithmetic Operators
12 May, 2021

There are around 7 arithmetic operators available in python. These are called as binary operators because they act on two operators. a = 13, b = 5 Operator Meaning Example …

Operators in Python
11 May, 2021

An operator is a symbol that performs an operation. Some examples of operations are addition, subtraction, multiplication etc. a + b is an operation where a,b are operands and ‘+’ …

Bear Call Spread
23 December, 2020

Bear call spread is an option strategy used by traders to cap their maximum loss. At first, a trader is bearish with the downside capped, so he initiates a sell …

    35 Comments

emerging leader

  • Basics of Python
  • Emerging Leaders
  • Financial Education
  • Fundamental Analysis
  • Investment Ideas
  • IPO Issues
  • Nifty 50
  • Options Corner
  • Risk Management
  • Technical Corner
  • Uncategorized

Past Batches

December 2018 – Completed

March 2019 – Completed

July 2019 – Completed

November 2019 – Completed

January  2020 – Running

Get Updates

Subscribe to our mailing list and get learning stuff and updates to your email inbox
Loading

Accordions

Company Summary

Bajaj Electricals Limited is engaged in engineering and projects; power distribution, illumination and consumer durables businesses.

It has a range of domestic and kitchen appliances comprising water heaters, room heaters, coolers, irons, mixers, induction cookers, toasters, kettles, microwave, rice cookers, gas stoves, non-electrical kitchen aids and pressure cookers.

It offers ceiling, table, pedestal, wall, fresh air and industrial fans, and lighting solutions, such as light sources, light emitting diode-based lighting products, domestic luminaires, torches and lanterns.

Key Highlights of Company Business

Segments and Products

The Company's business segments consist of

  1. Lighting;
  2. Consumer Durables;
  3. Engineering & Projects,

The Lighting segment includes lamps, tubes and luminaries.

The Consumer Durables segment includes appliances and fans.

The Engineering & Projects segment includes transmission line towers, telecommunications towers, highmast, poles and special projects.

The Others segment includes diecasting and wind energy.

Financial Performance

Financial Ratios

Trading Campus

7718989954

info@tradingcampus.in

Company

  • About Us
  • Gallery
  • Team
  • Contact Us
  • Careers

Courses

  • Technical Analysis
  • Algo Trading
  • Options
  • Fundamental Analysis
  • Risk Management
  • Algo Trading using Python

Support

  • Learning Center
  • Forum
  • Login
  • Videos

Education WordPress Theme by ThimPress. Powered by WordPress.

Copyright © 2018 Trading Campus. All rights reserved.