Beta

Beta measures the volatility of a stock or mutual fund portfolio relative to the overall market, usually the Nifty 50 or Sensex.

A beta of 1 means the fund moves in line with the market; a beta above 1 means it is more volatile; a beta below 1 means it is less volatile. For example, a banking fund with a beta of 1.2 will typically rise 12% when the market rises 10% and fall 12% when the market falls 10%. Beta helps investors assess the systematic risk of a fund.