Downside beta

Downside beta is a measure of how risky an investment is when compared to the market. It measures how much more or less an investment goes down when the overall market goes down. A downside beta of 1.2 means that for every 1% drop in the market, the investment will drop more, by an average of 1.2%. A downside beta of 0.8 means that for every 1% drop in the market, the investment will drop less, by an average of 0.8%. Generally, higher downside bets are riskier than lower downside bets.