Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of financial instrument to the financial market in which this instrument is traded. For example if Beta of equity is 2, it will be expected to significantly outperform market when market is going up and significantly underperform when market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns during over time.
In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.
Apple Beta Assessment
In accordance with recently published financial statements Apple Inc has Beta of 0.74. This is 54.17% higher than that of the Consumer Goods sector, and 1025.0% lower than that of Electronic Equipment industry, The Beta for all stocks is 428.57% lower than the firm.
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Apple is rated below average in beta category among related companies.
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Apple Inc Profile
Apple IncUSA StockCurrency: USD - US DollarTraded on NASDAQ
As returns on market increase, Apple returns are expected to increase less than the market. However during bear market, the loss on holding Apple will be expected to be smaller as well.
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