Compensation Glossary

Beta

A mathematical measure of the volatility of a particular stock, mutual fund, and/or portfolio in comparison with the entire market. Specifically, it measures the stock, fund or portfolio performance during the last 5 years. A beta of 1.0 indicates that an asset closely followed the market; a beta greater than 1.0 indicates a greater volatility than the market - a beta of less than 1.0 indicates that the asset was less volatile than the market.