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What is a beta? How is different from standard deviation of returns?

What is a beta? How is different from standard deviation of returns?

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Beta is a measure of sensitivity or volatility of stock in relation to market.It represents market risk or systematic risk of stock.It is a component of CAPM equation.Beta of market portfolio is 1 and any stock having beta greater than 1 means that stock has higher systematic risk and similarly when stock has beta lower than 1 then that stock has less systematic risk than Market.

Standard deviation is also a measure of risk but it is total risk of stock which contains both systematic as Well as unsystematic or firm specific risk

Hence we can say beta is measure of systematic risk and standard deviation is a measure of both systematic and unsystematic risk

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