Question: Look at the picture comparing the 5 year returns for Tesla (TSLA) and S&P 500 (^GSPC). It's obvious that the return volatility (i.e. standard deviation)

  1. Look at the picture comparing the 5 year returns for Tesla (TSLA) and S&P 500 (^GSPC). It's obvious that the return volatility (i.e. standard deviation) of Tesla stock is at least 3-5 times greater than that of S&P 500 (the blue line). Yet, if you look up Tesla's 5 year beta (on the summary page of Yahoo Finance (Links to an external site.)) is much less than one (around 0.5) suggesting that TSLA is much LESS volatile than the market.
  2. How do you explain this discrepancy between what standard deviation tells you (that TSLA is extremely risky and fluctuates a lot) and what beta tells you (that the stock is almost 40% SAFER than the overall market (SP500)?

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