In equilibrium, securities prices would be such that there would be a simple straight-line relationship between the expected return on a security and the extent of its covariation with the posited underlying factor. "Following the conventions" of the standard statistical technique of regression analysis, Sharpe used the Greek letter (3 (beta) to designate the extent of the sensitivity of the returns on a stock or other security to changes in the underlying factor. "Thus the result could be succinctly stated: securities with higher betas will have higher expected returns." (Sharpe 1995, p. 218) The logic of the diversification of investment portfolios gave an intuitive explanation of the dependence of expected return on beta.

Donald MacKenzie, An Engine, Not a Camera, loc. 237