Beta

A company's beta = the rate of change of the company's stock price when the market changes by 1%.

A stock with a beta greater than one will move higher in times of stock market rises, and lower during times of stock market falls.

A stock with a beta less than one will move lower in times of stock market rises, and be more stable during times of stock market falls.

If the risk free rate = 5.55%.
The return from the market = 10.55%
The risk premium = 5.00%.

If the average return from a particular stock averaged over time = 13.95%, then its beta = (13.95-5.55)/5.00 = 1.68.

The market as a whole always has a beta = 1.0.

Reference Pages

Measuring Risk

Capital Asset Pricing

Risk Premium