| Value of Beta | Interpretation | Example |
|---|---|---|
| β < 0 | Asset generally moves in the opposite direction as compared to the index | Gold, which often moves opposite to the movements of the stock market |
| β = 0 | Movement of the asset is uncorrelated with the movement of the benchmark | Fixed-yield asset, whose growth is unrelated to the movement of the stock market |
| 0 < β < 1 | Movement of the asset is generally in the same direction as, but less than the movement of the benchmark | Stable, "staple" stock such as a company that makes soap. Moves in the same direction as the market at large, but less susceptible to day-to-day fluctuation. |
| β = 1 | Movement of the asset is generally in the same direction as, and about the same amount as the movement of the benchmark | A representative stock, or a stock that is a strong contributor to the index itself. |
| β > 1 | Movement of the asset is generally in the same direction as, but more than the movement of the benchmark | Volatile stock, such as a tech stock, or stocks which are very strongly influenced by day-to-day market news. |
This helps great in determining to play safe or play risky.
also , long term plays would be beta between 0 and 1
beta = 1 implies companies that show the overall index (AAPL = 0.93)
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