There are many factors influence the price movement for the stocks. Broadly we can categorize those movements into technical or fundamental reasons. Short term investors can more focus on the technical data and long term investors can more focus on the fundamentals of the company. This article explains how the beta value shows risk factor for particular stock. What is Beta value of the stock?
Most popular risk indicator for a stock is beta. Beta measures the volatility of price in the market. Fro example, it gives you the fair idea on how the stock will react for market movements. If the beta is 1, the stock has no volatility and moves with market. If it is greater than 1, it has more volatility and over react for the market movements. For example, if the market saw a down of 2%, this stock will fell down more than 2% because of its higher beta. (Note that price fluctuations are determined by many other factors. High beta stock may react opposite if the particular stock has any breaking news on that day). A beta less than 1 means it tends to be less volatile than the market.
Why you should know Beta?
It is important to know the risk before investing into a specific stock. For small investors, judging the risk is essential before investing any huge amount. I would advice you to check the beta, if you are interested in investing on the less volatile stock. Any mistake on the stock selection would erode all your money.
Beta value of some stocks in January 2011
| NSE Code | Security Name | Beta |
| IBREALEST | Indiabulls Real Estate Ltd. | 2.28 |
| PUNJLLOYD | Punj Lloyd Ltd. | 2.22 |
| IFCI | IFCI Ltd. | 2.13 |
| IOB | Indian Overseas Bank | 2 |
| SYNDIBANK | Syndicate Bank | 1.9 |
| JSWSTEEL | JSW Steel Ltd. | 1.89 |
| LICHSGFIN | LIC Housing Finance Ltd. | 1.87 |
| YESBANK | Yes Bank Ltd. | 1.86 |
| IDBI | IDBI Bank Ltd. | 1.8 |
| HDIL | Housing Development and Infrastructure Ltd. | 1.73 |
| GMRINFRA | GMR Infrastructure Ltd. | 1.7 |
| UNIONBANK | Union Bank of India | 1.62 |
| RECLTD | Rural Electrification Corporation Ltd. | 1.53 |
| ANDHRABANK | Andhra Bank | 1.49 |
| BANKINDIA | Bank of India | 1.44 |
| GLENMARK | Glenmark Pharmaceuticals Ltd. | 1.38 |
| BHARATFORG | Bharat Forge Ltd. | 1.33 |
| FEDERALBNK | Federal Bank Ltd. | 1.31 |
| ASHOKLEY | Ashok Leyland Ltd. | 1.27 |
| MRPL | Mangalore Refinery & Petrochemicals Ltd. | 1.26 |
| MUNDRAPORT | Mundra Port and Special Economic Zone Ltd. | 1.17 |
| TECHM | Tech Mahindra Ltd. | 1.16 |
| LUPIN | Lupin Ltd. | 1.12 |
| PFC | Power Finance Corporation Ltd. | 1.09 |
| CORPBANK | Corporation Bank | 1.04 |
| BIOCON | Biocon Ltd. | 1.03 |
| TATACHEM | Tata Chemicals Ltd. | 1.01 |
| INDHOTEL | Indian Hotels Co. Ltd. | 1 |
| SRTRANSFIN | Shriram Transport Finance Co. Ltd. | 1 |
| ABIRLANUVO | Aditya Birla Nuvo Ltd. | 0.97 |
| CANBK | Canara Bank | 0.95 |
| UNIPHOS | United Phosphorus Ltd. | 0.79 |
| EXIDEIND | Exide Industries Ltd. | 0.75 |
| BANKBARODA | Bank of Baroda | 0.74 |
| ADANIENT | Adani Enterprises Ltd. | 0.71 |
| MCDOWELL-N | United Spirits Ltd. | 0.71 |
| HINDPETRO | Hindustan Petroleum Corporation Ltd. | 0.58 |
| ASIANPAINT | Asian Paints Ltd. | 0.56 |
| OFSS | Oracle Financial Services Software Ltd. | 0.54 |
| CUMMINSIND | Cummins India Ltd. | 0.53 |
| PATNI | Patni Computer Systems Ltd. | 0.52 |
| COLPAL | Colgate Palmolive (India) Ltd. | 0.49 |
| GRASIM | Grasim Industries Ltd. | 0.48 |
| GLAXO | Glaxosmithkline Pharmaceuticals Ltd. | 0.42 |
| TORNTPOWER | Torrent Power Ltd. | 0.4 |
| BEL | Bharat Electronics Ltd. | 0.26 |
| CROMPGREAV | Crompton Greaves Ltd. | 0.26 |
| ULTRACEMCO | UltraTech Cement Ltd. | 0.2 |
| CONCOR | Container Corporation of India Ltd. | 0.15 |
| MPHASIS | MphasiS Ltd. | 0.15 |
