The beta of a company refers to the measurement of the volatility of a company’s stock. In other words, when the company’s stocks are in perfect harmony with the direction of the market, then the company’s shares are said to have a beta of 1. The perfect beta happens when the market and the company’s stocks exhibit similar trends with regard to the value at which they trade. Dowd explains that when a company has a beta that is greater than 1, then the company’s stock is more volatile than the volatility of the market (4). If the company’s beta is less than 1, then the implication is that the company’s stock is less volatile than the volatility of the market. Sometimes, a company can have a negative value for beta. A negative beta implies that the stocks of a company move in a direction that is opposite to the direction the market moves.