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Beta

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Beta
Beta is the measure of the contribution of a single asset to the Risk of Portfolio.

Beta is the covariance of this asset's returns with the returns of the Portfolio. Beta measures the Volatility of a Security.
    
The Risk of any individual share can be measured as the Volatility of a share relative to the market as a whole. This ratio is known as the Beta of a share.
    
For standard reference, the entire market has a Beta of 1.00 and a return that corresponds to the Market risk Premium. The riskiness of the market as a whole is measured against a Risk less rate of return. This is constituted by the highest-quality money-market instruments, which are considered to be Risk less but still generate a return to make up for the Time value of money.
    
Stocks that magnify general market moves that are more volatile than the market average that has betas of more than 1. Stocks that dampen market moves and are less volatile on up or downswings are assigned betas of less than 1.

A dedicated stockholding Portfolio Will feature a Range of different Beta stocks relative to the policy stance of the Trust.
Posted by  Cityscape Abu Dhabi
 
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