[jasonn]

Originally Posted by MrPrena

Sorry for misunderstanding.
I meant 90% as 9/10 trade has been all gains since 2006.
Don't give me too much credit for it during 2007-2009. I had to bag hold few stocks till it was on positive side.

edit to add:
Yeah, Beta is basically a "multiples" of risk volatility.
Depends on which school (Econ or Finance), they will approach you with capm systemetic risk, or basically a scaler multiple of risk respect to change in indices.
For an good example would be if "beta" is 2, and the stock is in S&P500. If S&P500 went up 5% in 1month, you should "expect" the stock to go up 10%. If it went up lower than 2% , it didn't do good.
If S&P500 went up 5% and if your stock went up 8%, you actually did not beat the market.
Here are basic models which some "finance for dummies" classes teaches.
http://quant.stackexchange.com/quest...-line-straight
http://www.fundmanagersoftware.com/h...lculation.html
http://www.fundmanagersoftware.com/h...lculation.html
http://www.finquiz.com/blog/2013/04/...h-derivatives/
http://www.columbia.edu/~ks20/FE-Not...Notes-CAPM.pdf

Thanks again MrPrena; I checked out all of those finance for dummies links and it's gibberish to me currently hahaha.

For your example, the stock increase of 8% technically still did better than the S&P 5%; it's just that for the risk you took, it should have done better right?