Beta is a measure of stock volatility developed by investors. It indicates how well the stock price correlates with the S&P 500 Index. The beta will be 1.0 if it moves in lockstep with the index. Stocks with betas greater than one are more volatile than the S&P 500. Stocks with betas lower than 1.0 are less volatile.
Because the prices of some stocks are highly volatile, economists devised this metric.
Because of this unpredictability, that stock is a riskier investment. As a result, investors expect a higher return in exchange for the increased risk.

Stock volatility refers to the degree of variation in the price of a stock over a specific period. It is a statistical measure of the dispersion of returns for a given security or market index. High volatility implies larger price fluctuations, indicating increased uncertainty and risk, while low volatility suggests more stable and predictable price movements. Traders and investors use volatility as a crucial metric for assessing potential risks and returns. Volatility can be influenced by various factors, including economic indicators, market sentiment, and geopolitical events. Volatility is often measured using standard deviation or beta, providing insights into the level of market turbulence. Understanding and managing stock volatility is essential for making informed investment decisions, as it can impact trading strategies, risk tolerance, and the overall performance of investment portfolios. Traders often employ volatility-based indicators to navigate market conditions and adapt their approaches accordingly.