beta rating

Fin

a means of measuring the volatility (or risk) of a stock or fund in comparison with the market as a whole.

     The beta of a stock or fund can be of any value, positive or negative, but usually is between +0.25 and +1.75. Stocks of many utilities have a beta of less than 1. Conversely, most high-tech NASDAQ-based stocks have a beta greater than 1; they offer a higher rate of return but are also risky.

     Both alpha and beta ratings should be readily available upon request from investment firms, because the figures appear in standard performance reports. It is always best to ask for them, because beta calculations can involve mathematical complexities.

See also alpha rating