A beta coefficient measures the degree of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk in market terms of the entire market. In statistical terms, beta represents the slope of the line through a regression of data points from an individual stock's returns against those of the market.it also measures systematic risk as it is the volatility that affects many industries, stocks, and assets e.t.c. Systematic risk affects the overall market and it is a challenge to predict. Unlike with unsystematic risk, diversification cannot help to smooth systematic risk, because it affects a wide range of assets and securities. For example, the Great Recession was a form of systematic risk; the economic downturn affected the market as a whole.
