The two sound similar, but measure two different ATTRIBUTES of a stock:

Beta is the measure of a stock relative to the market: It’s useful for calculating the portfolio market risk and for hedging individual positions.

Volatility on other hand measures how a stock has moved relative to itself during a TIME PERIOD: Think of it as the stock’s percentage change over a time distance – a day, a month, or a year.

Let’s take a high growth bio-tech stock as an example. Regeneron Pharmaceuticals (REGN), has a beta of 1.2. This is much lower than the beta of typical small cap bio-tech stocks, because Regeneron is a large company with an ESTABLISHED track record and multiple projects in the research pipeline. On the other hand, it has different historical VOLATILITIES for different time periods. For example, we say that REGN has moved 45% over the past 100 days, 40% over the past 50 days, and 36% over the past 30 days.

Stocks with high volatility tend have smaller market cap and more volatile earnings drivers. You would typically see significant movements in small-cap tech stocks after they release earnings. Vice versa, boring large-cap dividend stocks without much quarterly earnings surprise tend to have lower volatility.

The two sound similar, but measure two different attributes of a stock:

Beta is the measure of a stock relative to the market: It’s useful for calculating the portfolio market risk and for hedging individual positions.

Volatility on other hand measures how a stock has moved relative to itself during a time period: Think of it as the stock’s percentage change over a time distance – a day, a month, or a year.

Let’s take a high growth bio-tech stock as an example. Regeneron Pharmaceuticals (REGN), has a beta of 1.2. This is much lower than the beta of typical small cap bio-tech stocks, because Regeneron is a large company with an established track record and multiple projects in the research pipeline. On the other hand, it has different historical volatilities for different time periods. For example, we say that REGN has moved 45% over the past 100 days, 40% over the past 50 days, and 36% over the past 30 days.

Stocks with high volatility tend have smaller market cap and more volatile earnings drivers. You would typically see significant movements in small-cap tech stocks after they release earnings. Vice versa, boring large-cap dividend stocks without much quarterly earnings surprise tend to have lower volatility.