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gerlach  
#1 Posted : Wednesday, July 10, 2024 10:32:11 AM(UTC)
gerlach

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We are pleased to announce a new feature in our StockCentral Portfolio module -- the Portfolio Beta Report. Available as a View or as an Advanced Report in StockCentral Portfolio, this tool can help evaluate the risk level in a portfolio using beta (β), a measure of the past volatility of returns with respect to broader market returns.

A security or portfolio with beta greater than 1.0 is considered more volatile than the market (it will rise more in rising markets and fall more during falling markets), while beta less than 1.0 indicates a security that is less volatile. A beta below 0.0 is negatively correlated to the market.

Our report uses the five-year beta of a stock, or, if the company does not have a five-year history, the three-year beta. Companies with less than three years of price history show as "n/a" in the report and are not included in the calculation of the overall portfolio averages. Beta is only available for common stocks and REITs that trade on North American exchanges, and not for mutual funds, ETFs, or other securities that trade outside the U.S. and Canada.

The Report also calculates the Weighted Average Portfolio Beta to provides a quick review of the risk level of holdings.

Many long-term focused growth stock portfolios are built so that they earn the best returns during rising markets, so a weighted average portfolio beta greater than 1 is usually desirable. If the portfolio beta is below 1, the holdings may not have enough capital appreciation characteristics to outperform the broader market.

Of course, past performance is not a predictor of future results, so this is just one more tool in a savvy investor’s toolbox.

You can find the report in the Portfolio section of StockCentral. We hope you find it useful -- please let us know if you have any questions or suggestions!

Doug

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