Beta Calculator
Measure the volatility of a stock against the market.
Calculated Beta (β)
0.00
Understanding Market Risk with Beta
Beta (β) is a fundamental concept in finance that measures the volatility—or systematic risk—of a security or a portfolio in comparison to the market as a whole. It is a key component of the Capital Asset Pricing Model (CAPM). This calculator allows you to compute the historical Beta of an asset by comparing its price movements to those of a market index, providing a quantitative measure of its risk profile.
Frequently Asked Questions (FAQ)
What is Beta?
Beta is a measure of a stock's volatility in relation to the overall market. A Beta of 1 indicates that the stock's price will move with the market. A Beta of more than 1 indicates the stock is more volatile than the market, while a Beta of less than 1 means it is less volatile.
How is Beta calculated?
Beta is calculated by dividing the covariance of the stock's returns and the market's returns by the variance of the market's returns. This calculator performs this statistical analysis for you based on the historical price data you provide.
What does a negative Beta mean?
A negative Beta means that the stock tends to move in the opposite direction of the overall market. For example, if the market goes up, a stock with a negative Beta would be expected to go down, and vice versa. These are rare and are often considered counter-cyclical.
0 Comments