If I create a diversified portfolio of 2*beta stocks, can I expect to get twice the return of S&P 500.
Example: Out of the universe of stocks available to me I randomly choose 10 stocks whose betas are 2. For a year if S&P 500 got 10 %, does that mean I will make 20 % in my portfolio. Reverse is true as well, if S&P made -10 %, I will make -20%.
Do these statements make sense ?