Beta is a concept that measures the expected move in a stock relative to movements in the overall market. A beta greater than 1.0 suggests that the stock is more volatile than the broader market, and a beta less than 1.0 indicates a stock with lower volatility.
How do you use a portfolio beta?
Take the percentage figures and multiply them with each stock's beta value. For example, if 25% of your portfolio comprises of Apple and it has a beta of 1.43, its weighted beta would amount to 0.3575. Add up the weighted beta figures and that gives you your portfolio beta.
How do you analyze a portfolio beta?
The beta of a portfolio is the weighted sum of the individual asset betas, According to the proportions of the investments in the portfolio. E.g., if 50% of the money is in stock A with a beta of 2.00, and 50% of the money is in stock B with a beta of 1.00,the portfolio beta is 1.50.