New answers tagged beta
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Beta is a measure of the historical volatility of a security compared with the volatility of an index which contains many stocks. So its value depends on the historical volatility of both securities.
Implied volatility is an estimate of future volatility and it can change dramatically in days, even hours (consider an earnings announcement or other pending ...
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"if the energy sector has not participated in the broad market recovery and its valuation multiples are still low, that might suggest that its beta has become disconnected from the market and so it should have a lower beta and be less sensitive to another drawdown"
Your argument seems to be "because it's (relatively) cheap it's less likely to ...
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This is really more a subjective question (and thus not ideal to this SE) but I'd suggest you're comparing apples to pineapples. Beta is a sensitivity to broad market return, valuation multiples are really more about relative value or 'cheapness'.
A company can be cheap and have lower beta/vol or higher beta/vol than some set of its peers. Betas and ...
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