<commit_before>Calculating Stock Beta, Volatility, and More
############################################

:date: 2014-1-9
:tags: finance, investing
:slug: calculating-stock-beta
:author: <NAME>
:description: Introduction to calculating Beta, Alpha and R-squared for a stock. This article
 will also include a python code snippet to calculate these measures. This method is for instance
 used by sites like yahoo to show beta, volatility etc.
  
:keywords: investment, stock beta
	
 
Have you ever wondered how to calculate the Beta value that is shown in 
GoogleFinance_ or YahooFinance_ and what does it mean from an investment perspective? 
This article will give you an introduction to the concept and demonstrate how
you can calculate various time series measures for a stock using python.

Beta, Alpha and R-squared
-------------------------
Beta of a stock is a measure of relative risk of the stock with respect to the market.
The convention (though not a rule) is to use S&P 500 index as the proxy for market. 
A beta value of greater than 1 means that the stock returns amplify the market returns
on both the upside and downside. On the contrary, a beta value of less than 1 means 
that the stock returns are subdued in comparison to the market returns.
It is very important to understand that beta is a relative measure of risk, and 
not an absolute measure of risk. That means that we are only saying how risky the stock is
vis-a-vis the market. If the stock market itself is overheated and volatile, then
a beta of 1 means that the stock is equally volatile, and equally risky.<commit_msg>Update stock-time-series-analytics.rst<commit_after>Calculating Stock Beta, Volatility, and More
############################################

:date: 2014-1-9
:tags: finance, investing
:slug: calculating-stock-beta
:author: <NAME>
:description: Introduction to calculating Beta, Alpha and R-squared for a stock. This article
 will also include a python code snippet to calculate these measures. This method is for instance
 used by sites like yahoo to show beta, volatility etc.
  
:keywords: investment, stock, beta
	
 
Have you ever wondered how to calculate the Beta value that is shown in 
GoogleFinance_ or YahooFinance_ and what does it mean from an investment perspective? 
This article will give you an introduction to the concept and demonstrate how
you can calculate various time series measures for a stock using python.

Beta, Alpha and R-squared
-------------------------
Beta of a stock is a measure of relative risk of the stock with respect to the market.
The convention (though not a rule) is to use S&P 500 index as the proxy for market. 
A beta value of greater than 1 means that the stock returns amplify the market returns
on both the upside and downside. On the contrary, a beta value of less than 1 means 
that the stock returns are subdued in comparison to the market returns.
It is very important to understand that beta is a relative measure of risk, and 
not an absolute measure of risk. That means that we are only saying how risky the stock is
vis-a-vis the market. If the stock market itself is overheated and volatile, then
a beta of 1 means that the stock is equally volatile, and equally risky.
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