Quote:
Originally Posted by MrPrena
Well, if beta was 1 and S&P500 gain was 5%, 8% gain on one specific stock is consider beating the market.
Well, if beta was 2 and S&P500 gain was 5%, 8% gain on one specific stock is not consider beating the market. You took 2x the risk than the index/indices market. Therefore you should have 2x more gain.
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A lot more to it than that. For example: what if the R-Squared were .10?
Quote:
Originally Posted by jasonn
gotcha,
I just looked at my stocks' betas, they are all below 1 except two which are 1.18 and 1.09. Those are also the only two in the red currently.
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A perfect example of why a beta measurement, by itself, is of little to no significance to the educated investor.