Beta is a way to measure how much a security or a portfolio moves in relation to the market or a benchmark. It shows the risk and volatility of a security or a portfolio compared to the market as a whole. A beta of one means the security or portfolio moves in line with the market. A beta higher than one means it is more volatile and sensitive to market movements. A beta lower than one means it is less volatile and less affected by market movements. The formula for Beta is: Where: - Covariance (Security, Market) is the measure of how much the security and the market move together. - Variance (Market) is the measure of how much the market deviates from its average.