Clarification about beta

Section 18 and 19, Course: Volatility Trading Strategies for beginners 



Hello there, in the section at the end of the video you talked about  instruments with Beta 1 and -1 are completely and inversely correlated with the benchmark.

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

Hi Daniel,



Yes, that's correct. When an instrument has a beta of +1, it means that it tends to move in the same direction as the benchmark. If the benchmark goes up, the instrument is likely to go up as well, and if the benchmark goes down, the instrument is likely to go down.



Conversely, when an instrument has a beta of -1, it indicates an inverse correlation with the benchmark. In this case, if the benchmark goes up, the instrument is expected to go down, and if the benchmark goes down, the instrument is expected to go up.



Hope this clarifies your doubt!



Thanks

Rushda