Financial Poise


  • October 5, 2021
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Beta measures the correlation between a particular stock and the S&P 500 stock index. Why does it matter? Understanding that correlation also measures volatility. High-beta stocks have greater volatility as the S&P moves up and down, while low-beta stocks have less. Volatility, in this context, is not a bad thing. Nor is it a good thing. It is just an objective fact that you can use to help inform your overall investment decisions.