The numerical change of β value can be studied according to different market conditions. In some industries such as nonferrous metals, transportation, steel, public utilities, etc., the beta value is generally less than 1, which is different from the characteristics of its low P/E ratio and cyclical stocks. Of course, on the contrary, hot stocks with high growth and attracting market attention are usually above 1, and can be predicted without calculating the beta value.
Moreover, this function can select different stocks at different stages after securities investment. When the market index drops unilaterally, investors who adopt position control can keep a low position ratio and choose their own smaller markets by using beta value, such as public utilities, transportation and so on. In the process of decline, the decline of these industries is less than that of the market.
Use of trial version:
1. Calculate the cost of capital and make investment decisions (only invest in projects with a return rate higher than the cost of capital).
2. Calculate the cost of capital and formulate performance appraisal and incentive standards.
3. Calculate the cost of capital and evaluate assets (beta is the basis of the discounted cash flow model).
4. Determine the systemic risk of a single asset or portfolio for portfolio investment management, especially the hedging (or speculation) of stock index futures or other financial derivatives.
5, the application of beta coefficient in the securities market, beta coefficient reflects the sensitivity of individual stocks to market (or market) changes, that is, the correlation between individual stocks and the market.