Featured Pathways

More pathways

Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

More pathways

Book a demo

Pricing

Ready to get started?

Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

Pricing

Ready to get started?

Featured Pathways

More pathways

Banking Essentials - Part I

This pathway will walk us through the basics of banks, starting with some of the different types and their main functions, then starting to look at the regulation faced by the banks, both before and after the Global Financial Crisis.

Greenwashing

Greenwashing is the act of distributing false information about something being more environmentally friendly than it actually is.

More pathways

Book a demo

Pricing

Ready to get started?

Plans & Membership

Our Platform

Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Finance Unlocked to your current platform

Featured Content

More featured content

Tackling the Cost of Living Crisis

In this video, Max discusses the cost-of-living crisis currently enveloping the UK. He examines its impact on households as well as the overall economy.

CSR and Sustainability in Financial Services

In the first video of this two-part video series, Elisa introduces us to sustainability. She begins by looking at the difference between sustainability and corporate social responsibility, two terms that can be easily confused.

More featured content

Book a demo

Pricing

Ready to get started?

Book a demo

Pricing

Ready to get started?

What is Beta?

What is Beta?

Abdulla Javeri

30 years: Financial markets trader

In the earlier video on the overview of linear regression, Abdulla explained the process of how to construct the regression line. In this video, Abdulla will discuss the related jargon used in financial markets and calculate the numbers for the regression line using Microsoft Excel functions.

In the earlier video on the overview of linear regression, Abdulla explained the process of how to construct the regression line. In this video, Abdulla will discuss the related jargon used in financial markets and calculate the numbers for the regression line using Microsoft Excel functions.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

What is Beta?

5 mins 38 secs

Overview

Beta is the relationship between an asset and the general return of the market. A positive beta means the asset’s value moves positively with the market and vice versa for assets with negative betas.

Key learning objectives:

  • Define beta

  • Understand how to calculate beta from a linear regression

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Summary

What is beta?

Beta can be any positive or negative number. Positive means if one goes up, you expect the other one to generally go up as well. The convention is to assign a beta of plus one to the market itself. So, a stock with a beta of plus one should track the market.  A negative beta suggests that if one goes up, you expect the other one to generally go down. A beta of 0 implies that the stock or portfolio is insensitive to market movements.

Take another example. If the beta of the stock or portfolio is 1.20 and the market goes up by 1%, we expect the stock to go up by 1.20% and to fall by 1.20%, if the market fell by 1%. In effect we’re saying that it is 20% more volatile than the market. Clearly then, beta can also be seen as a measure of a stocks’ relative volatility compared to the market.

How is beta calculated from a linear regression?

Beta can be calculated as the slope of the regression line. Linear regression provides the line of best fit that defines the relationship between two variables in the form of a simple formula:

y = bx+ c

The result for y is an estimate or expected result. In financial markets, x and y are usually measures of return, and the slope of the regression line is referred to as beta. Beta is used in estimating the return for y given a return for x as well as an indicator of the relative volatility of the stock or portfolio compared to the market.

Subscribe to watch

Access this and all of the content on our platform by signing up for a 7-day free trial.

Abdulla Javeri

Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.

There are no available videos from "Abdulla Javeri"