Beta
Beta measures how much a stock moves in relation to the broader market. It helps traders understand whether a stock is more volatile, less volatile, or moves in line with the market.
On Tradomate, Beta is calculated by comparing a stock’s daily returns with the returns of the Nifty 50 over a trailing 1-year period.
How traders use it
Section titled “How traders use it”- Identify high beta stocks (> 1) for aggressive moves
- Identify low beta stocks (< 1) for relatively stable behavior
- Find stocks that outperform during strong market trends
- Avoid high beta stocks during volatile or uncertain conditions
- Use beta to align trades with market direction
How to interpret Beta
Section titled “How to interpret Beta”- Beta = 1 → Stock moves in line with the market
- Beta > 1 → Stock moves more than the market (higher volatility)
- Beta < 1 → Stock moves less than the market (lower volatility)
- Beta < 0 → Stock moves opposite to the market (rare)
Simple example
Section titled “Simple example”If the market (Nifty 50) moves up by 1%:
- A stock with Beta = 1.5 may move up by ~1.5%
- A stock with Beta = 0.7 may move up by ~0.7%
Similarly, in a falling market, high beta stocks tend to fall more, while low beta stocks tend to fall less.
How to use in screener
Section titled “How to use in screener”- Add Expression
- Select → Advanced Indicators → Beta
- Choose operator (>, <, =, etc.)
- Enter value
Examples:
- High beta stocks → Beta > 1
- Low beta stocks → Beta < 1
- Moderate beta range → Beta between 0.8 and 1.2