Betas

• All beta values in 2011 are determined through the use of regression software. Regression analysis is used by the Money Line firm in developing its own beta. The difference is the data, its complexity and the experience of those collecting it. Furthermore, Money Line uses many other measures in the creation of --- or at least in the analysis of --- its beta values.
  
  

Regression

• A regression analysis is a statistical method performed with a specific computer program. Its purpose is to chart complex relations among variables. Data is entered into a computer system. Variables are defined. A dependent variable is one being defined, while independent variables are those variables dependent on the one being defined. A beta regression analysis is looking for variables that effect volatility. Volatility is the dependent variable. The independent variables might be the rate of inflation, average economic growth for the previous six months, market volatility in general, a specific time period, the existence of wars or other strains on fuel prices, or the level of unemployment and consumer confidence. All these independent variables are entered into the program, and the relationships will be listed according to the confidence level you demand.
  
  

Significance

• The regression analysis reveals how each of the variables influences the dependent variable, or the stock returns in a specific industry. Some variables, such as tax rates, might turn out to be insignificant, because their effect cannot be determined given the data. Others, such as inflation, might be highly significant if it has a huge effect on stock prices in this sector. This is what the regression analysis does. Therefore, the possibility of human error exists based on whether the variable is defined correctly and the quality or the reliability of the data.
  
  

Price Line Data

• The question is, who can best produce such analysis when dealing with stock volatility. Price Line measures its data against the New York Stock Exchange. In addition, Price Line uses five years of weekly volatility data for any field or company you might request. Because this firm has existed since 1931, it is likely that its data is excellent and that it has access to information independent researchers do not. This may lead many to choose Price Line.
  
  

Flexibility

• On the other hand, a large firm such as Price Line might be stuck in its older ways. Independent researchers might be constantly searching for new variables that others have not considered previously or have not operationalized properly. Smaller, independent researchers might be more flexible in choosing their data or variables and may not be set on a company line, as the larger firms tend to be.