Beta Rate of Return, Average, and the Standard Deviation of IMAX Corporation and Amazon.com, Inc.

Analysis of Beta of IMAX Corporation and Amazon.com, Inc.

Beta is a measure of volatility. Anyone wishing to invest in Imax Corporation and Amazon, Inc. stock would want to evaluate the volatility of the price of their stock. Volatility is the extent to which the price of the stock is exposed to market risk. A better way to understand the volatility of the two stocks is by analyzing their beta. A stock with a beta above one is considered more exposed to market risk, while a beta of less than one implies that the price of that particular stock is either less exposed to market or it is uncorrelated with the larger market (Bosch-Badia et al. 17). Apart from measuring the systematic risk of a stock, beta is also used in the Capital Asset Pricing Model (CAPM) in the calculation of the expected return of an asset based on its beta value and the expected market returns (Terregrossa & Eraslan 13). Beta is also referred to as the beta coefficient of an asset investment.

Beta is calcul...