Beta Calculator: Measure Stock Risk & Volatility
Our Beta Calculator computes beta using historical returns. Understand systematic risk and CAPM expected return.
What is Beta?
Beta = Cov(Stock, Market) / Var(Market)
Interpretation
- β = 1: Moves with market
- β > 1: More volatile (aggressive)
- β < 1: Less volatile (defensive)
- β < 0: Inverse movement
Example: Stock [5%, -3%, 12%], Market [3%, -1%, 10%]
- Beta: ~1.25
- R²: ~0.98
- CAPM Return: ~12.5% (Rf=6%, Rm=10%)
Formula
CAPM: E(R) = Rf + β × (Rm - Rf)
Pro Tips
- Use 3–5 years monthly data
- Compare to sector beta
- Use with Alpha
Limitations
- Historical ≠ future
- Ignores unsystematic risk
- Assumes linear relationship
Conclusion
Assess risk accurately. Use our Beta Calculator now.