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Beta as described: Standalone risk, or not?
The intro to this article very clearly states:
- Beta is important because it measures the risk of an investment that cannot be reduced by diversification. It does not measure the risk of an investment held on a stand-alone basis, but the amount of risk the investment adds to an already-diversified portfolio.
However, the Estimation section goes on to say:
- The relative volatility ratio described above is actually known as Total Beta... Total beta captures the security's risk as a stand-alone asset..., rather than part of a well-diversified portfolio.
So, which is it? — Preceding unsigned comment added by Kronn8 ( talk • contribs) 20:35, 16 February 2019 (UTC)
| This page is an archive of past discussions. Do not edit the contents of this page. If you wish to start a new discussion or revive an old one, please do so on the current talk page. |
Beta as described: Standalone risk, or not?
The intro to this article very clearly states:
- Beta is important because it measures the risk of an investment that cannot be reduced by diversification. It does not measure the risk of an investment held on a stand-alone basis, but the amount of risk the investment adds to an already-diversified portfolio.
However, the Estimation section goes on to say:
- The relative volatility ratio described above is actually known as Total Beta... Total beta captures the security's risk as a stand-alone asset..., rather than part of a well-diversified portfolio.
So, which is it? — Preceding unsigned comment added by Kronn8 ( talk • contribs) 20:35, 16 February 2019 (UTC)