Glossary
Beta
A measure of how sensitive a portfolio's returns are to movements in a benchmark index, whether that portfolio is a fund, a single stock or your own savings.
What it is
Movement relative to the index
Beta describes how sensitive a portfolio's returns are to movements in a benchmark index. It is calculated as the covariance between the portfolio's and the index's daily returns, divided by the index's variance. A Beta of 1.0 means the portfolio has historically moved in step with the index, below 1.0 means smaller swings, above 1.0 means larger ones.
- Beta below 1.0
- The portfolio has historically moved less than the index. Common in concentrated funds built around margin of safety rather than tracking the market's swings one for one.
- Beta above 1.0
- The portfolio has historically amplified the index's movements, both up and down. More common in portfolios with higher leverage or cyclical exposure.
- Beta is history, not a guarantee
- The figure is built on how the portfolio has actually moved against the index over a given period. A short window or an unusual period can produce a number that does not hold up over time.
In practice
What the number actually tells you
Beta over a short measurement window can swing sharply depending on which period happens to be measured, and only stabilises after many observations. A single Beta figure also says nothing about WHY a portfolio swings more or less than the index, only that it historically has. A low Beta in a concentrated fund can come from a very different sector mix than the index, not necessarily from caution.
Amos Value's Beta versus SIXPRX in August 2026
0.58*
* Based on the fund's history since inception (July 6, 2026), not the usual 12-month window. Can fluctuate more than a figure based on longer history.
“Get the downside right, and the upside takes care of itself.”
Common questions about Beta
Related concepts
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