Asset beta measure operating performance of the business
It measures the deviation between its future cash flows and those of the market ( i.e. future cash flows expected to be generated by the particular firm in relation to the expected cash flows by the same firms in the market).
It is also called unlevered beta.
Asset beta, by definition, reflects the beta of a company without debt. It is sometimes referred to as unlevered beta. For some companies, there are financial benefits to adding debt to the company. Using asset beta allows the evaluation of the volatility of a company's stock without this debt benefit. By reviewing the unlevered beta, you will have a better idea of the market risk of a company's stock.
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