Beta

Beta is a measure of the volatility of a security or a portfolio in comparison to the market as a whole. In general, a beta more than 1 indicates that the portfolio or security is more volatile than the market, while a beta of less than 1 indicates that the investment is relatively less volatile. Low beta stocks are also called defensive stock because investors like to hold them when the market is particularly volatile. High-beta stocks tend to be favored when the market is rising steadily and investors are happy to take greater risks in order to maximize profits.

For example, if a stock's beta is 1.5, theoretically it is 50% more volatile than the market. Conversely, if a stock’s beta is 0.60, theoretically it is 40% less volatile than the market.