Deep Dive: What Is Beta — How to Measure a Stock's Volatility Relative to the Market and Use It in Your Portfolio
Every stock moves differently when the market rises or falls. Some amplify every swing — doubling the market's gains on good days and doubling its losses on bad ones. Others barely budge, grinding steadily higher while the indexes whipsaw around them. The metric that captures this behavior is called beta, and understanding it is one of the most practical things an investor can do before buying a single share. Beta measures a stock's sensitivity to market movements. A beta of 1.0 means the stock tends to move in lockstep with the S&P 500. Above 1.0 and the stock amplifies market moves; below 1.0 and it dampens them. With the VIX volatility index recently fluctuating between 17.65 and 21.20 in February 2026 — reflecting moderate but persistent uncertainty around geopolitical tensions and Federal Reserve policy — understanding how individual stocks respond to market-wide volatility has never been more relevant. This guide breaks down what beta actually measures, how it's calculated, what the numbers mean in practice, and — most importantly — how to use beta when constructing a portfolio that matches your risk tolerance. We'll use real beta values from stocks across every major sector to show how this single number reveals surprisingly different risk profiles hiding behind similar-looking stock prices.