The beta formula measures a stock's volatility relative to the overall stock market. It can be calculated using the covariance/variance method, the slope method in Excel, and the correlation method. A beta value of 1 indicates that the stock closely tracks the movements of …

2024年2月7日 · There are two ways to determine beta. The first is to use the formula for beta, which is calculated as the covariance between the return (r a) of the stock and the return (r b) of the index...

2023年6月8日 · Beta (β) measures a stock's volatility or the degree to which its price fluctuates relative to the market as a whole. A benchmark index is chosen to represent the market in the beta calculation. An analyst will generally select an index most appropriate to …

2024年7月11日 · Beta (β) is the second letter of the Greek alphabet used in finance to denote the volatility or systematic risk of a security or portfolio compared to the market, usually the S&P 500 which has a...

The Beta coefficient represents the slope of the line of best fit for each Re – Rf (y) and Rm – Rf (x) excess return pair. In the graph above, we plotted excess stock returns over excess market returns to find the line of best fit.

2024年7月19日 · Calculating beta using the covariance/variance formula is probably the most common method of calculating the beta of a stock. This formula takes the covariance of the return of the market...

2022年6月16日 · Beta looks at the correlation in price movement between the stock and the S&P 500 index. Beta can be calculated using Excel in order to determine the riskiness of stock on your own.

2025年1月16日 · Beta is a key metric in stock trading, used to measure a stock’s volatility relative to the overall market. It helps investors understand how sensitive a stock is to market movements, making it an essential tool for risk assessment and portfolio construction.

Below is the formula to calculate stock beta value. Stock Beta Formula = COV (Rs,RM) / VAR (Rm) Here, If we focus on the components that go into the calculation of Stock Beta, it will become much more evident that: