Question
Suppose that Yahoo! Finance is correct, how do you explain this discrepancy between the volatility visible on the chart and the relatively low beta given
Suppose that Yahoo! Finance is correct, how do you explain this discrepancy between the volatility visible on the chart and the relatively low beta given by the data providers such as Yahoo! Finance?
Please take a look at the picture above. It shows Tesla stock price over the last few months (Red Line) with S&P 500 index drawn as a candlestick chart. As you can see the price of TSLA stock was MANY MORE times more volatile than the price of S&P 500 index. However, many services (such as Yahoo! Finance) report that TSLA's beta is less than 2.0 (1.69 to be precise). In other words, Yahoo! Finance reports that TSLA is less than twice as volatile as the market while you clearly see in the picture that it is 30-50 times more volatile than the market.
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587
