Beta Coefficient Calculator
Calculate stock beta to measure market risk
About this calculator
The Beta Coefficient Calculator helps investors measure a stock's volatility relative to the overall market. Beta indicates how much a stock's price moves in relation to market movements - a beta of 1 means the stock moves with the market, above 1 indicates higher volatility, and below 1 suggests lower volatility. This essential financial metric enables investors to assess investment risk, build diversified portfolios, and make informed decisions about stock selection based on their risk tolerance and market expectations.
How to use
Enter the stock's historical price data and corresponding market index values for the same time period. The calculator will compute the correlation between the stock's returns and market returns. Input at least 12-24 months of data for accurate results, then click calculate to get the beta coefficient value.
Frequently asked questions
What does a beta of 1.5 mean?
A beta of 1.5 means the stock is 50% more volatile than the market, typically moving 1.5% for every 1% market movement.
How much historical data do I need?
Use at least 12 months of weekly or monthly data, though 24-36 months provides more reliable beta calculations for most stocks.
Can beta be negative?
Yes, negative beta indicates the stock moves opposite to the market, though this is rare and typically seen in defensive assets.