™A historical beta estimate of 1.2 indicates modeled sensitivity relative to a specified benchmark; it does not guarantee a 1.2% move whenever the benchmark moves 1%.
Risk & Portfolio
Beta
A measure of how an asset’s returns have varied relative to a benchmark.
Plain-English context
Put the definition to work.
Specify benchmark and estimation window. Beta is not maximum downside, correlation itself or a forecast for each day.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. Investor.gov — asset allocation and diversification