CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What Is BETA?

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  • BETA is a measure of the volatility of shares compared to the entire market or index, e.g. US500 or DE30.
  • BETA can also be generally defined as a relatively correlated variable.

What is BETA?

When BETA equals 1, this means that the company’s price volatility is the same as the market’s. However, if the BETA variable is greater than 1, it means that the shares are more volatile than the overall market volatility. For example, if the company’s BETA is 1.4, this means that the company’s share price is 40% more volatile than the market.

On the other hand, if BETA is less than 1, it means that the share price of a given company is less volatile than the market. For example, let’s assume that the shares of a company have a BETA of 0.3. This means that the company’s shares are 70% less volatile than the market.

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