Stockerblog submits: Beta is one measurement of risk. Beta, also known as the beta coefficient, measures how the expected return of a stock is correlated to the performance of the stock market as a whole. A positive beta, such as a one or two, means that the stock usually tracks the market in general. A zero beta means that the stock price is not correlated with the stock market at all. And a negative beta means that the stock tracks the market inversely.
A beta of one means the stock tracks the market directly, e.g. 1% up in the market means 1% up for the stock. The higher the beta, the more riskier the stock, yet the greater the return potential. For example, if the stock market increases by 3%, a stock with a beta of two should increase by 6%; in other words, twice as much. So for day traders, high beta stocks may be the way to go.
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