Beta

Beta (UKˈbiːtə, USˈbeɪtə; uppercase , lowercase , or cursive ; bē̂ta or víta) is the second letter of the Greek alphabet. In the system of Greek numerals, it has a value of 2. In Ancient Greek, beta represented the voiced bilabial plosive b. In Modern Greek, it represents the voiced labiodental fricative v while b in borrowed words is instead commonly transcribed as μπ. Letters that arose from beta include the Roman letter and the Cyrillic letters and . Like the names of most other Greek letters, the name of beta was adopted from the acrophonic name of the corresponding letter in Phoenician, which was the common Semitic word *bait ('house'). In Greek, the name was βῆτα bêta, pronounced bɛ̂ːta in Ancient Greek. It is spelled βήτα in modern monotonic orthography and pronounced ˈvita. Archaic Greek alphabets The letter beta was derived from the Phoenician letter beth . In the system of Greek numerals, beta has a value of 2. Such use is denoted by a number mark: Β′. Software release life cycle#Beta and Alpha–beta pruning Beta is used in finance as a measure of (historical; pseudo-implied) financial asset sensitivity to the relevant benchmark index. Conditional on the benchmark index, the resulting beta value can vary considerably (S&P500 vs NASDAQ vs ETF of a specific industry). Beta should not to be confused with standard deviation (or the semi-variance, which considers only negative returns): the preferred measure of the "riskiness" (historical volatility of returns) of a financial asset or a portfolio in isolation. Beta can be calculated as the covariance of a financial asset (or portfolio) with its benchmark index, divided by the variance of the benchmark index. Since the industry of finance gravitates towards return generating activities, typically the historical returns (percentage changes) are used in the calculations Beta values (among others). There are numerous other methods a financial analyst can employ to derive Beta values if historical prices are not available.