In finance, the slope of that “line of best fit” has a special name: beta (represented by the Greek letter β). Beta is arguably the single most important number for understanding a stock’s riskiness compared to the overall market. It measures the sensitivity of a stock’s return to the market’s return—in other words, it reveals the stock’s personality.

Think of the stock market as a big ocean. A stock’s beta tells you what kind of boat it is.

• A high-beta stock is like a speedboat. It leaps and crashes with every wave. When the market surges, the speedboat flies, but when the market gets choppy, it gets tossed around violently.
• A low-beta stock is like a heavy tanker. It’s so massive that it barely rocks, even in a big swell. It’s stable, but it won’t give you a thrilling ride when the waters are calm.
• A beta-of-1 stock is like a sturdy fishing boat that simply moves with the ocean currents.

Here’s a simple guide to what the numbers mean:

Using historical data, the estimated regression for General Electric (GE) vs. the S&P 500 yields a beta of 1.0575.

In simple terms, this means: For every 1% move in the S&P 500, GE’s stock is predicted to move about 1.06% in the same direction. In short, GE is a tiny bit more dramatic than the overall market. This single number is what helps an investor decide if a stock like GE matches their own personality—are they looking for something that rides the waves, or something a bit more stable?

While beta is the star of the show, the regression gives us a few other useful numbers, too.