What is the difference between volatility and Beta?
Even though the two sound similar, but they measure two different attributes of a stock.
1. Beta is the measure of a stock relative to the market. Beta is useful for calculating the portfolio’s market risk and for hedging individual positions.
2. Volatility on other hand measures how a stock has moved relative to itself during a time period. Think of it as the stock’s percentage change over a time distance – a day, a month, or a year.
Such that dividend stocks tend to have “low volume”, while high-tech or bio-pharma growth stocks tend to be volatile, in particular around earning releases.