Hacker News Reader

I think you can get a rough sense of whether this is true by using Beta (http://en.wikipedia.org/wiki/Beta_(finance)) - Beta represents the riskiness of the stock relative to the market as a whole

After a quick google it seems Facebook's beta is ~2. So a NASDAQ fall of <3.5% is an indication that something other than a general downturn impacted Facebook's price

Please correct me if my understanding is wrong

View on HN

The first paragraph is correct but the second is not quite right, and is a common misconception. Beta is a lagging indicator and by itself cannot explain a stock's movement or lack thereof.

There are much better guides to stock volatility such as the put-call ratio, implied volatility of options or general market volatility as measured by VIX.

It is, other stocks with low betas had a bad day as well. Some of it might be the Oculus, but most of it probably isn't

Reply on news.ycombinator.com