Beta measures how much a stock’s price has historically moved relative to a broader market index. A beta above 1.0 means the stock has tended to move more sharply than the market, a beta below 1.0 means it has tended to move less, and a beta near 0 means its price movements have shown little relationship to the market at all.
For example, a stock with a beta of 1.3 has historically moved about 30% more than the market’s own swings — if the index rose 10%, that stock has tended to rise around 13%, and the same amplification has applied on the downside.
Beta is useful for matching stocks to an investor’s comfort with price swings — an investor risk quiz result leaning conservative might favour lower-beta stocks, while a more aggressive profile might be comfortable with higher-beta names. Beta is calculated from historical price data, though, so it describes past behaviour rather than guaranteeing how a stock will move going forward.