Post #1392 by Aussi on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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I suppose it's theoretically possible to have a common stock that has negative beta, but I think in the real world you would only see that in an inverse fund or similar. In any case, VL doesn't have any.

I am not sure how GTR1 calculates beta, but if you limit the universe to SP500 stocks and use beta(1,253), there are up to 42 stocks that have negative beta. For instance, 2001 Feb to October had a lot of negative Beta stocks. At the moment, there is zero SP500 stock with negative beta.

My understanding of beta from Investopedia is Beta = 1, stock moves in line with market, beta = 0, stock moves don't correlate with the market and beta = -1, stocks move in opposite direction of market (I seem to have a lot of these at the moment :) ).

Craig

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