Beta measures the stock response to the reference index.

It is calculated as the theoretical regression coefficient between the stock performance and the index performance. Its goal is to compare a stocks return versus the index returns.

Beta is evaluated by the how many changes in the stock can be explained by index changes.

For example, stock with a 1.2 beta means that if the index increases or decreases by 1%, then the stock will increase or decrease by 1.2%.