Reducing Volatility

Index : 1,194 | 1Yr : +4.12% | 1Mo : -5.31%

Category : Investing Strategies

Min Investment : 18,271

Sharpe Volatility Trend

Beta is a measure of volatility of a security or portfolio in comparison to the overall market. The market has a beta of 1, so anything less than that is considered lower beta than the market. If the beta of a stock is 0.6 it means that its volatility is only 60% of the market. Low beta can either mean that the stock is less volatile than the market but moves in the same direction or that it is not correlated with the market.

Since low beta cannot be justified as a sound investment rationale in isolation, the stocks in this theme are picked primarily by using medium term low beta as a screener and then considering other qualitative factors like earnings growth and valuations which make them worth investing in. It has stocks from various different sectors thereby making it a diversified portfolio in itself. There are two main goals in investing, making money & not losing money. The theme is more suitable for investors with low to moderate risk profiles and who place a higher emphasis on stability.

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