In the stock market, explain "beta".?

Beta is kind of like boiling down the entire data of a stock down to one number. Technically, it shows the long term projection of a stock, like the gradient on a graph, or the slope of it.

Beta is probably at the core of the current bad economic situation around the world where good and bad securities were bundled together such that the bundle looked good, and were then sold to the investors who though it was a good investment because of good beta, but were obviously wrong.

Beta is how much a stocks returns, not the price , vary with a market index, such as, but not confined to, the S&P 500, The returns are usually calculated monthly. The index is understood to have a beta of 1. So if the stock has a beta of less than 1 its returns vary less than the index. And a beta above 1 means the returns vary more than the market index. Beta is a measure of how risky a stock is relative to the market index. But there is no standard time frame to calculate betas. It can be calculated over 3 years or 5 years or any length of time. And the R-squared value has to be relatively high, at least 85 or else the beta is meaningless.

Beta is a number representing a stocks comparitive movement with the market as a whole. For example if the market, say Dow Jones, moves up or down 2% then a stock that moves up or down 2% as well would have a Beta of 1. If the stock moved 4% then the Beta would be 2.

To help add to the answers below:

If a stock has a Beta of 3, and the stock market appreciates by 10%, the stock generally reacts to what the market is doing by a factor of 3 -- so in this case, it would be predicted to rise by 30% (3 * 10%).

You Betcha' Take your typical Wall Street Stock Corporation. They have two parts. The Stock Broker part and the Floor Trader part. Now the Stock Broker part (or boiler room) cons you into opening an account while the second part, the floor trader, waits for you to place your electronic trade (or computer trade) and once that is pre-set and locked in the floor trader figures out the best way to move the market so you always lose and the the stock brokerage firm always wins. See? You are betting you will make money and the Brokerage Firm is "Betting" it can pick your pocket by deliberately triggering you entry point and then driving down the market until you leave at a loss.

the correct answer is, the beta number represents a ratio comparing the S&P 500 and the stock price of whatever stock you r looking at. the higher the beta,the more volitile the stock price, the lower the beta the less volitile when compared to the S&P500