What is Beta?
A beta of 1.0 means a fund moves in lockstep with its benchmark. A beta of 0.6 means it typically moves about 60% as much - smoother in both up and down markets. Beta measures sensitivity to the market, not quality: a low-beta fund can still have zero skill, and a high-beta fund can still have real alpha.
β = Cov(Rp, Rm) / Var(Rm)
Beta is about sensitivity to the market, not skill - that’s what alpha measures separately.
Beta vs alpha, across 6 real funds
CHART
Beta vs Alpha - 6 real funds
Every fund here runs below-market beta (all under 1.0). Beta position alone doesn't predict alpha - the highest-alpha fund isn't the highest- or lowest-beta one.
Funds compared: Parag Parikh Flexi Cap · DSP Value · ICICI Prudential Value · SBI Focused · Parag Parikh ELSS Tax Saver · SBI Multicap
WHAT THIS MEANS FOR YOU A low beta isn’t automatically “safer” in a way that matters, and a high beta isn’t automatically “riskier” in a way that costs you - check alpha and Sharpe Ratio alongside beta, never beta alone.
METHODOLOGY Beta and alpha both computed over a trailing 3-year window as of 2026-08-31, against each fund’s own benchmark. Data: Punji risk analytics. Not investment advice.