What is beta on etoro?

Beta in stocks serves as a pivotal metric for quantifying the volatility of an individual stock in relation to the broader market's average fluctuations. This statistical tool offers investors a valuable insight into the potential risk associated with a particular stock.

Such a high beta underscores the inherent risk involved in investing in this particular stock. On the one hand, it presents an opportunity for significant gains during market rallies. However, investors must also brace for potentially steep losses during market downturns.

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Understanding beta begins with the concept of how a stock's price movements respond to shifts in the market. A stock with a beta value greater than 1 indicates that it tends to be more volatile than the market as a whole.

Conversely, a stock with a beta less than 1 implies that its price fluctuations are muted compared to the market's average. This suggests a relatively stable performance, potentially appealing to risk-averse investors.