BacktestFolio · Glossary
Beta
In plain language
If the market rises 10% and your portfolio rises 15%, Beta is roughly 1.5. If it loses 8% when the market loses 10%, Beta is roughly 0.8. A high Beta means more swings — both up and down.
Technical definition
Measures the sensitivity of portfolio returns to benchmark movements. β=1 means the portfolio moves in line with the benchmark; β>1 amplifies movements; β<1 dampens them. It represents the systematic (non-diversifiable) risk of the portfolio.