Beta
How much the share price has moved relative to the market, historically.
It is the market's standard risk input, and it feeds the cost of capital used in every discounted cash flow.
How it is computed here
Regression slope of the share return against the market return
Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business. Filed under risk. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Measures past price wobble, not the chance of permanent loss. Graham and Buffett both rejected it as a definition of risk.
- Unstable: it changes materially with the window and index chosen.
- Computed by us from two years of weekly returns against SPY.
Questions
How is beta calculated?
Regression slope of the share return against the market return. Today's market price against the latest available fundamentals. Combines today's market price with the most recently filed fundamentals. It moves whenever the price moves, with nothing having changed in the business.
What does beta tell a value investor?
It is the market's standard risk input, and it feeds the cost of capital used in every discounted cash flow.
When does beta mislead?
Measures past price wobble, not the chance of permanent loss. Graham and Buffett both rejected it as a definition of risk. Unstable: it changes materially with the window and index chosen. Computed by us from two years of weekly returns against SPY.