The correlated volatility of an investment relative to a market index.
A measure of non-diversifiable systematic risk.
A measure of the sensitivity of an investment to moves in the broader market.
Beta is a clue as to the volatility of an investment. Beta can be used in risk models to estimate the chance that diversification will not work because a basket of investments tend to move in the same direction.
In some cases a low beta investment can be highly volatile and driven by idiosyncratic factors not related to price swings in the market.It is a common error to view beta as a comprehensive indicator of risk.