How to Analysis Stock Performance of Using Beta Value

Analysis Stock PerformanceBeta Value is the one of the stock indicator  and tool to analysis stock performance which provides major information’s regarding the volatility of the share. We can simply say it’s a measure of relevant share volatility as respect with Sri Lankan Colombo Socket exchange volatility. This indicator is much popular nowadays. Normally Market volatility (Colombo Stock Exchange or any other stock exchange other than Sri Lanka) take as 1 and shares beta value taken with respect to 1 market base value. In Colombo Stock Exchange beta value is calculate respect to All Share Price Index (ASPI) and S&P SL20. So by using knowing beta value you can predict or guess different results as follows.

Negative Beta Value:

If your share provide a negative beta value this simply says that your share is moving reverse side to the market. This is normally rarely happened in the market. Now You can analysis stock performance if you got negative beta value

Zero Beta Value:

This shows that value of your stock is same and irrespective to Colombo Stock Exchange Market. This is also very rarely happen.

Beta Value between 0 and 1:

Beta Value between 0 and 1 says that your share price move less compare to the CSE market movement. This is the most commonly happened in any market and most of good stocks are fall under this category. If your stocks fall under this category your stock got very low risk as well as low return too. Most of Blue chip companies got this beta value where that risk of these stocks is very low.

Beta Value 1

This shows that your price of stock is moving with respect to the same direction of the market. There is index related financial product in the market and this product can get this value.

Beta value greater than 1

This shows that your stock price moving faster than market movement. Most of high growing companies got the beta value greater than 1 and this shows that there is a probability of a high return form this stocks and the risk of investing these type of stocks are also high. Normally these shows in also a low liquidity shares and some times the price of these shares may get much higher.

If you go to Colombo Stock exchange website to analysis stock performance and select a company you can get a beta value of that share according to two indexes in Sri Lanka. Chevron Lubricants Lanka PLC Companies Beta Values Against ASPI (As of Third Quarter of year 2014) is 0.27 and Beta Values Against S&P SL20 (As of Third Quarter of year 2014) are 0.23. This is one of the great blue-chip companies in Colombo Stock Exchange. Harischandar Mills PLC Beta Values Against ASPI(As of Third Quarter of year 2014) are 1.06 and Beta Values Against S&P SL20 (As of Third Quarter of year 2014) are 1.18 . Harischandar Mills PLC stocks are got high price and low liquidity. So by checking the stocks beta value in CSE you can get a good idea about how the market behavior.