Beta, in stock lingo, is your volatility compass. Real estate REITs in Q2 2024 have betas around 0.7, benefiting from steady rental income despite market rate changes. “Our aircraft’s design eliminates the need for complex components such as gear boxes, in-flight liquid cooling systems, and thrust vectoring mechanisms,” the company said in the IPO prospectus. Beta less than 1 means the asset is less sensitive than the benchmark. In other words, the stock would move with the benchmark, but not to the same degree. Imagine an asset with a beta of 0.25. If the S&P 500 rises 5%, the CAPM suggests the stock would rise 1.25%. What is beta in investing? It’s a metric that helps traders gauge market-related risk. As of June 2024, energy sector betas average 0.85 due to stable crude prices, contrasting with AI stocks whose betas hover near 1.5 amid earnings-driven rallies.
