Betting Against Beta: An Unconventional Strategy For Unusual Success

Importance of Beta to Retail Investors

Beta is a key component of systematic risk, representing a stock’s sensitivity to overall market changes. Essentially, it gauges how a stock might respond to shifts in the broader market. In this special report, Vaishnavi Chauhan highlights how the dynamics of low-beta and high-beta stocks can affect your portfolio 

Within the stock markets, risk and reward harmonise as an inseparable dynamic duo. They are always connected and work together, just like a lock and key. You need both for a complete picture. Risk is a vast concept and within it, we find two main categories: systematic risk and unsystematic risk. Systematic risk, also called market risk, is inherent to the overall market or a specific market segment. It cannot be diversified away and impacts all investments to some degree. Economic conditions, interest rates, and geopolitical events contribute to systematic risk.