Beta measures a stock's sensitivity to overall market movements and is a key indicator of systematic risk. It is calculated as the covariance of the stock's returns with the market's returns divided by the variance of the market's returns: Beta = Cov(Rs, Rm) / Value at Risk (VaR)(Rm). A beta of 1.0 means the stock tends to move in lockstep with the market.

Stocks with beta greater than 1.0 are considered aggressive and tend to amplify market movements. For example, a stock with a beta of 1.5 would be expected to rise 15% when the market rises 10%, but also fall 15% when the market drops 10%. Defensive stocks with beta below 1.0 are less volatile and provide more stability during market downturns. Negative beta stocks move opposite to the market and are rare.

R-squared indicates what percentage of the stock's movements can be explained by market movements. A high R-squared (above 70%) means beta is a reliable predictor. Alpha represents the stock's excess return beyond what beta predicts, with positive alpha indicating outperformance. Together, these metrics provide a comprehensive view of a stock's risk profile and its relationship to the broader market.