Why it is possible that a companys beta is larger than the S

Why it is possible that a company\'s beta is larger than the S&P 500\'s while it\'s S.D. is smaller than S&P 500\'s? Or, vice versa? In either of those two scenarios, what do you say about which is riskier, your company or S&P 500?

SD 8412 .4231 Beta Ford Motor Co.0.85 S&P; 500

Solution

The given scenario is possible , beta measures risk of an asset compared to its benchmark and in this benchmark is S&P. Whereas standard deviation tells the riskiness of individual asset.

So to compare the riskiness between Ford and S&P, we should look beta.

This beta tell that , if S&P moves by 1% then Ford moves by 0.85% only so Ford is less risky among two.