What are the Uses of Beta?

What are the Uses of Beta?

Abdulla Javeri

30 years: Financial markets trader

Beta can play a part in stock selection and hedging strategies. In this video, Abdulla explores some applications of beta in the markets.

Beta can play a part in stock selection and hedging strategies. In this video, Abdulla explores some applications of beta in the markets.

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What are the Uses of Beta?

5 mins 2 secs

Overview

Beta is a highly used measure that can explain cyclicality and be used for hedging purposes. Beta is also a crucial component in calculating a company’s cost of capital.

Key learning objectives:

  • Explain the characteristics of high/low beta stocks

  • Describe the practical uses of beta

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Summary
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Expert
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.

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