Glossary
Beta: definition
Beta is a statistical description of how a security or fund has moved with a chosen benchmark. It is backward-looking. It is not a personality trait of the company.
In practice
A beta of 1 means the security moved, on average in the sample, with the benchmark. Higher than 1 means larger average moves. Lower can mean duller moves or simply a poor fit. Beta depends on the benchmark, the period and the frequency you choose. Two analysts can publish two betas for the same share and both be arithmetically honest. Beta says nothing about whether the business is good.
A worked example
A gold-mining share can show a low beta to the local equity index over one window and a high beta over another that includes a commodity shock. The number moved because the window moved.
Related
Sources and review
Last reviewed: 2026-10-13. Next review due 2027-04-13. Status: editorial review of this page, not a live verification of every third-party fee.
Author: WiT Markets Editorial, Editorial desk. The WiT Markets editorial desk writes explanatory pages, comparison context and research notes. It separates sourced facts from items that are not confirmed, and it does not provide personal recommendations.
Reviewed by: WiT Markets Research Review.
Primary and regulatory sources
- Investor.gov — checked 2026-10-13