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Measure portfolio risk using Beta

February 26, 2014

Looking for a way to measure and manage risk in your portfolio? As the market swings up and down, it is a good idea to measure the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

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The Beta of a stock tells you the tendency of its returns to reflect swings in the market.

If beta is:

  • = 1, the stock price moves with the market
  • > 1, the stock is more volatile than the market
  • < 1, the stock is less volatile than the market

Tracking Beta is a simple way to measure risk and compare a specifics stock's movement to the rest of market.

You can find the Beta on the detailed quote pages and on TMX Powerstream.

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