If both Beta values are negative.

Sisira · 1 If both Beta values are negative. Tue Mar 27, 2012 3:11 pm

Sisira

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Dear experts

If both ASI & MPI beta values are negative for a particular period in a counter.... What is the conclusion we can arrive at?

Thanks in advance for your comments!

sriranga · 2 Re: If both Beta values are negative. Tue Mar 27, 2012 6:13 pm

sriranga

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Sisira wrote:Dear experts

If both ASI & MPI beta values are negative for a particular period in a counter.... What is the conclusion we can arrive at?

Thanks in advance for your comments!

First of all I'm not an expert on this, what I read I share with you.

Negative beta is a rarity, but we can find in CSE couple of counters encountering the situation.

Please read the following points from ehow.com may be helpful.

Defining Beta Values
The beta value of a stock is calculated using historical prices and comparing the volatility of the stock price to the volatility of the stock market, using a market volatility index of 1.
• Negative beta (a rarity) - the stock price moves the opposite of the market.
• Zero beta (a rarity) - the stock price isn't changing, no matter where the market is moving.
• Beta between 0 and 1 - the stock price is less volatile than the market.
• Beta of 1 - the stock price is moving with the market and in the same direction.
• Beta greater than 1 - the stock price is fluctuating more than the market.

Interpreting Beta Values
• Beta values between 0 and 1 - Blue chip stocks typically have beta values between 0 and 1, indicating low-risk, low-return stocks.
• Beta values greater than 1 - Growth and technology companies usually have beta values in this range and fall into the high-return, high-risk class.
• Beta values much greater than 1 --These high values can be indicative of high price volatility because the stock isn't selling well.

Further reading
http://forum.srilankaequity.com/t11506-stock-beta-and-volatility?highlight=beta

Sisira · 3 Re: If both Beta values are negative. Tue Mar 27, 2012 7:45 pm

Sisira

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Thank you very much I love you

Sriranga

sabba1234 · 4 Re: If both Beta values are negative. Wed Mar 28, 2012 11:03 am

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Hi guys... I had the similar question about the negative beta too... please correct my dout if possible.... if the beta is negative, does it mean that even if the company fundamentals are great the share price does not react to it... Please pass your suggestions... Thanks