Lesson Overview

Portfolio Beta

Just as we are able to calculate the individual data of any stock out there, we can also calculate a complete portfolio beta.

Later on this will help us in understanding if our portfolio is tilted one way or another and if we need to make adjustments with particular strategies to rebalance ourselves.

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  • Larry

    Kirk,
    Disregard the last post, I see that you address my question in the next tutorial.

    Thank you,
    Larry

  • Hey Erik – so Beta of 1 means that the stock acts like the market. Beta of -1 means it acts in the exact inverse of the market. So yes, anything greater than -1 or +1 will be more volatility than the market.

  • Yes it means that in some cases the correlation is not 1:1 with the S&P depending on the sector or industry.

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