I actually meant on a daily basis in your work what do you use beta to calculate. I’m in equity research and the only time I’d think to use it would be in working out the equity risk premium for a company - although I tend not to use beta even then. I’m sure more quantitaively orientated jobs must use it in other things.
Mobius Striptease Wrote: ------------------------------------------------------- > NakedPuts Wrote: > > > > > > > 1.2. Sometimes 1.4. Sometimes I add a size > > premium to the market risk premium. So > basically, > > whatever I want. > > that is just weird to say that it is always bigger > than one… I don’t deal with any companies who deserve a beta less than 1.
I use beta to analyze country equity index risks. How risky is Bovespa vs S&P500. Though I tend to break it down into what is the relative volatility of the index (how much more or less widely it fluctuates) and how closely correlated the index is. I also use beta to try to control market exposure. When I’m nervous about markets but don’t want to try to time them, I try to keep my portfolio beta close to 0. I do this because I feel I do better comparative analysis of investment options than absolute analysis.