Beta is a crucial measure for assessing market risk and exposure. It helps investors understand how an asset moves in relation to the broader market. A high beta indicates an asset is more volatile than the market, making it riskier but with greater potential for returns. A low beta suggests stability but with potentially lower returns. Traders use beta to align their portfolios with risk tolerance and investment objectives. Additionally, beta is often used in conjunction with the Capital Asset Pricing Model (CAPM) to assess expected returns.