Investopedia

Continue to Site »

International Beta

Filed Under » ,
Dictionary Says

Definition of 'International Beta'

Better known as "global beta", international beta is a measure of the systematic risk or volatility of a stock or portfolio in relation to a global market, rather than a domestic market. The concept of international beta or global beta is especially relevant in the case of large multinational companies with worldwide operations whose stocks are more closely correlated with a global equity index than with the benchmark equity index in their country of domicile.
Investopedia Says

Investopedia explains 'International Beta'

The basic capital asset pricing model (CAPM) can be used to determine the expected return on an asset based on its domestic beta and expected domestic market return. Similarly, the global CAPM can be used to calculate expected returns on an asset based on its global beta and expected return from a global index, such as the Morgan Stanley World Index.  

The term "international beta" in the context of finance or portfolio theory should not be confused with international beta testing, which refers to the testing of software products in international markets.



Articles Of Interest

  1.

    Beta: Gauging Price Fluctuations

    Learn how to properly use this measure that can help you meet your criteria for risk.

  2. Beta: Know The Risk

    Beta says something about price risk, but how much does it say about fundamental risk factors? Find out here.

  3. Understanding Volatility Measurements

    How do you choose a fund with an optimal risk-reward combination? We teach you about standard deviation, beta and more!

  4. The Capital Asset Pricing Model: An Overview

    CAPM helps you determine what return you deserve for putting your money at risk.

  5. Investors Need A Good WACC

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality.

  6. Inspecting A Country's Debt

    Tensions over just how to handle debt are pitting the rich world against the developing world like never before.

  7. Exploring Non-Dollar Currencies For Forex Trading

    Learn how investments in foreign currencies can diversify your portfolio.

  8. Emerging Markets' Environmental Commitment

    Most people think of the industrial and developed world as leaders when it comes to green technologies and environmental stewardship. After moving past their high-growth stages, many developed ...

  9. A Look Into Foreign Direct Investment Trends

    Foreign direct investments play an increasingly important role in countries as an indicator for a healthy economy in terms of economic growth and long-term capital movement.

  10. Why China's Currency Tangos With The USD

    Congress often debates pressuring China to appreciate its currency, but the yuan/dollar peg has benefits for both countries.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center