Last Updated on 21 September, 2020 by Therobusttrader
Beta is a performance metric that measures volatility against a benchmark index, like the S&P 500. The beta is used to evaluate, among others, the performance of mutual funds.
A beta below 1 means that the mutual fund was more volatile than the benchmark index. A beta above one means that the mutual fund experienced less volatility than the benchmark index.
Investors may use beta together with alpha, which is a performance metric that measures the relative return of the security to the benchmark index.