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what does "beta" mean?

I am a beginner.
In the tutorial(Getting Started Tutorial), I tried the cord below;

from alphalens.tears import create_full_tear_sheet

create_full_tear_sheet(al_data)  

then, i got this sheet;
Ann. alpha -0.010
beta 0.113
Mean Period Wise Return Top Quantile (bps) 0.194
Mean Period Wise Return Bottom Quantile (bps) -0.434
Mean Period Wise Spread (bps) 0.628

So, what does "beta" mean?

4 responses

First off, welcome to Quantopian and the world of quant finance! There is a very good video explaining alpha and beta in this post (https://www.quantopian.com/posts/alpha-and-beta-in-finance) Take a look. If you have any questions after that, either reply here, or probably better, reply to that post where it might help others too.

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Hello,
Thank you for recommending the video which explains "beta"!!
I could understand well and realized there are many things I have to learn.

Hi ,

"Beta" is a coefficient that corresponds to the sensitivity of an asset to a benchmark (e.g SPY) that is to say it's a measure of how risky an asset is.

As an example ,

Suppose that the beta of an asset like AAPL is equal to 2 . This means that if SPY varie about 10% than AAPL will , in theory , vary by 20%.

Hope It's clear for you :)

Hello,
Thank you for your clear explanation!!
I could understand !