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.
About BetaIn 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.
WalMart Beta Assessment
In accordance with recently published financial statements WalMart Stores Inc has Beta of 0.26. This is 165.0% lower than that of the Services sector, and 21.21% lower than that of Discount, Variety Stores industry, The Beta for all stocks is 85.71% lower than the firm.
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WalMart is rated below average in beta category among related companies.
WalMart Stores Inc Profile
As returns on market increase, WalMart returns are expected to increase less than the market. However during bear market, the loss on holding WalMart will be expected to be smaller as well.
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