Beta Coefficient

A coefficient that is a measure of a stock's relative volatility. The beta is a co-variance of a stock in relation to the rest of the stock market. Any stock with a beta higher than one is more volatile the market, but provides the potential for higher returns. Any stock with a lower beta usually rises or falls more slowly than the market. Lower-beta stocks pose less risk, but generally offer lower returns.

As a base for comparison, the market has a beta of 1.0, and stocks are ranked based on their deviation from a beta of 1.0.