Beta

A measure of how much a stock tends to move relative to the overall market.

Part of the Market & Trading Basics course · Lesson 1 of 5

Formula

Covariance(Stock Returns, Market Returns) / Variance(Market Returns)

What it is

Beta describes a stock's sensitivity to broad market moves. A beta of 1.0 means the stock has historically moved in line with the market; above 1.0 means it tends to swing more than the market, and below 1.0 means it tends to swing less. A negative beta means it has tended to move opposite the market.

Why it matters

Beta is a quick gauge of a stock's market-driven (systematic) risk and is the key input in the Capital Asset Pricing Model for estimating expected return. The pitfalls: it is backward-looking, it changes with the time window and the index used, and it only captures market-correlated risk — not company-specific risk.

How it's calculated

It is the slope of a regression of the stock's returns against the chosen market index's returns over a historical period — equivalently, the covariance of stock and market returns divided by the variance of market returns.

How Quintarthai uses it

Beta is shown in the Key-metrics grid on a stock's Summary page and on the Statistics tab; view it on the deep-analysis page.

Cross-border note. Beta depends on the benchmark, so a Canadian stock measured against the S&P/TSX Composite can differ from the same stock measured against the S&P 500 — check which index a quoted beta uses.

FAQ

Does a low beta mean a stock is safe?

Not entirely — low beta means less market-driven volatility, but the stock can still carry significant company-specific risk that beta does not capture.

What does a beta of 1.5 mean?

On average, the stock has moved about 1.5% for every 1% move in the market, in the same direction — implying higher volatility than the market.

See Beta on a real company

Open any stock in Quintarthai and explore it live across the screener and company pages.

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