Asymmetric is imbalance. Asymmetric is more of one thing, less of another.
An example of asymmetric is more profit than loss or more reward than risk. The payoff is non-linear.
The beta of an investment is a measure of the systematic or volatility because of exposure to market movements as opposed to individual security factors.
- Beta is the tendency of a security’s returns to respond to trends the market.
- Beta is also a measure of relative strength or relative momentum.
For example, if we are looking at the beta of a stock and assume the S&P 500 stock index is “the market” if the stock has a beta of 1.5 it means the price has moved 50% more than “the market”.
So, an Asymmetric Beta must mean the beta (movement relative to the market) is asymmetric (imbalanced).
Asymmetric Beta is a position taken with a non-linear asymmetric payoff. That is, the beta is asymmetric (more or less than 1) and more than symmetry (a beta of 1).
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