what is beta 
in finance beta is a measure of volatility of a security or portfolio compared to the market as a whole tracking beta over time can provide investors with a useful risk profile for the asset compared to a major index the bottom linedispersion refers to a statistical measure of the range of potential outcomes for an investment based on its historical volatility or returns two important ways to represent dispersion are alpha which calculates risk adjusted returns and beta which describes returns relative to a benchmark analyzing the dispersion of possible returns can help you understand the level of risk represented by a particular investment although it s important to keep in mind that a security s future returns may diverge from its past performance 