![]() ![]() The slope of the regression line represents the beta of the company – but there are several issues: ![]() The process of calculating beta is by running a regression model that compares a stock’s historical returns to the market benchmark returns (e.g. However, beta is under constant criticism from industry practitioners based on the notion that it is a flawed measure of risk. the relative volatility compared to the broader market (S&P 500). The Industry Beta is an alternative approach to estimating a company’s beta, in which a peer-group derived beta is applied to the target being valued.īeta (β) is a metric that represents the sensitivity of a security or portfolio to systematic risk, i.e. ![]()
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