Beta quantifies how much an asset moves relative to a market benchmark (typically the S&P 500). A Beta of 1.0 means the asset moves in lockstep with the market. A Beta of 1.5 means it amplifies market moves by 50% — going up 15% when the market rises 10%, and falling 15% when it drops 10%.
Beta below 1 indicates lower sensitivity to market swings — defensive stocks and bonds often have negative or near-zero betas. Some assets like gold can have near-zero or even negative beta, providing portfolio diversification during market downturns.
Important nuance: Beta is backward-looking and computed relative to a specific benchmark. An asset can have a low beta relative to the S&P 500 but high beta relative to emerging markets. Always check what benchmark is being used.
On StressTest.pro, Beta is derived using a rolling regression of daily returns against VTI.US (Vanguard Total Stock Market ETF) as the broad market proxy over the full measurement window.