BETA (FINANCE)

Beta of stock in online stock trades is defined as a numerical value which is describing the relation of its return with financial market of online stock trades. Value of beta for any asset or stock in online stock trades means, its price does not correlate with the online stock trades’ market value. It is considered as an independent stock or asset. Positive value beta shows that price value of asset follow the online stock trades. While the negative value of beta gives the idea that the stock is going in opposite direction of the online stock trades.
Correlation is an obvious thing between the companies associated with the same industries. And some time it is presented in same kind of stock. This co relational risk is measured with the factor, beta in online stock trades.
Beta is an important parameter for defining capital pricing value of any stock in online stock trades. Beta measures the variance of any which cannot be measured by any other risk management techniques. Beta of any asset can be analyzed of any individual company using regression analysis against online stock trades market index.
Formula:
Βa =      Cov (γa , γp)   .
                 Var (γp)
In the above formula, a parameter, γa  represents rate of return of any asset, γp measures the rate of return of portfolio. Cov represent the covariance between both of the rates of return. Beta is also referred as correlated relativity, and it can be said that beta is used for the measurement of sensitivity of asset return value to online stock trades asset value. Taking the measurements of beta can gives you clues about the volatility and liquidity in the market of online stock trades.  Beta of online stock trades market is 1 and if a stock goes up than the market, its value will go above the beta and similar is the case in reverse.