NIFTY HIGH BETA 50 (NIFTY HIGH BETA 50) live share price today at NSE

Nifty High Beta 50 Index - A Brief Introduction

The Nifty High Beta 50 Index is a strategy Index of the National Stock Exchange (NSE). It focuses on tracking the performance of stocks that have a high Beta in the last year. The weights of the Nifty High Beta 50 index stocks are decided as per the beta value of each constituent. 

The Nifty High Beta 50 Index is owned and operated by NSE Indices Limited, a wholly-owned subsidiary of NSE.  It is responsible for managing, restructuring, and handling the index's daily operations. 

Additionally, the Nifty High Beta 50 Index is governed by a three-tier governance structure comprising the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity,) and the Index Maintenance Sub-Committee.

Nifty High Beta 50 Index Stocks - Selection Criteria

1. The company must be domiciled in India and must be traded at the national stock exchange. 
2. Companies must rank within the top 300 by average free-float market capitalisation and average daily turnover for the last six months ending February, May, August, and November. 
3. The company must have a listing history of 1 year and a trading frequency of 100% in the last one-year period. 
4. The Beta of securities is calculated based on the trailing price of the past 1 year. 
5. The top 50 securities with high Beta form part of the index. 
6. If the existing securities of the index are ranked within the top 100 at the time of review, the same can be retained in the index. This is done to reduce the number of scrips replaced in the index. 
7. Securities with a Beta greater than 1 will be selected as an index constituent at each review. If this criterion is not fulfilled, the scrip with the highest Beta in the replacement pool will be considered for selection. 

The Nifty High Beta 50 Index is rebalanced at every quarter during the year, for which the data for the last six-month period ending on the last day of February, April, August, and November are considered. 

What is Beta?

Beta (β) is a financial term used to depict the risk a security or portfolio carries for generating returns relative to the whole market. Beta is a crucial term used in the capital asset pricing model (CAPM), which is used to price risky securities while considering the cost of capital and expected returns.  Beta is simply a measure of portfolio risk relative to that of the market. 

A higher Beta (β) means that a security or portfolio in question is highly risky and can offer a greater expected return. On the other hand, a lower Beta indicates reduced risk and returns.

Calculation of Beta (β):

                                   Covariance

Beta (β) Formula = ━━━━━━━━ 

                            Variance 

What Is The Use Of Beta In The Nifty High Beta 50 Index?

Beta is a measure of the return volatility of a stock or portfolio in relation to the market return. In India, market returns are represented by the performance of the Nifty 50 Index.

Beta is used in the Nifty High Beta 50 Index to weigh securities within the index. This means that a stock with the highest Beta is given the highest weight in the index. It is known as the beta-based weighing method. 

Calculation of the index constituents’ weight: 

                       Beta i 

      𝑤 𝑖 =  ━━━━━━━━

                      100            

                      ∑  Beta

                      i = 1

 Key Takeaways on The Nifty High Beta 50 Index

• The Nifty High Beta 50 Index is a thematic index of the National Stock Exchange (NSE) of India. It was launched on 19th November 2012 with a base value of 1000 and a base date of 31st December 2003. 
• It tracks the performance of the top 50 NSE stocks with high Beta values. The Nifty High Beta 50 index stocks have risk and a simultaneous return-generating capability. 
• The weights of the securities included in the Nifty High Beta 50 Index are decided as per the respective Beta value of the constituents. 
• Beta (β) is the measure of volatility in returns of the securities relative to the market return.