Beta

This coefficient shows the volatility of a stock vs the systematic risk of the entire market. A beta of 1 means its price activity correlates with the market, <1 shows stability, and >1 is more volatile than the market (theoretically riskier).

Among mining stocks, you’ll often find beta well above 1, especially during exploration. Once a company is producing, risk lowers and beta tends to hover around 1. However, as all indicators and calculations, there are caveats: a solid producer that has gone through a substantial period of outperformance can show values above 1, and a small cap stock that has languished for months can be ‘safely’ placed under 1, thus deeper analysis is important to understand why beta is where it is, at any given time.

A security’s beta is calculated by dividing the product of the covariance of the security’s returns and the market’s returns by the variance of the market’s returns over a specified period. Platforms like TradingView and others show the value in the stock summary.