Our Beta Calculator is designed for financial professionals and investors to assess the risk associated with a particular investment compared to the market. This tool helps in understanding how sensitive a stock or portfolio is to market movements.
All calculations are based on standard financial analysis methodologies. Ensure accuracy by consulting official market data sources.
The beta of a stock is calculated using the formula:
Beta = Covariance(Stock, Market) / Variance(Market)
For instance, if the covariance between a stock and the market is 0.03 and the market variance is 0.01, the beta would be:
Beta = 0.03 / 0.01 = 3.0
A beta calculator is a tool used to measure the volatility or systematic risk of a financial security or portfolio compared to the market as a whole.
A beta greater than 1 indicates the security is more volatile than the market, while a beta less than 1 indicates it is less volatile.
Investors use beta to understand a stock's market risk compared to the overall market, aiding portfolio diversification strategies.
Covariance is a statistical measure of the directional relationship between the returns on two assets.
Yes, a negative beta indicates an inverse relationship with the market.