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Beta calculator

Beta measures how sensitive an investment is to market movements. A beta of 1 moves with the market, above 1 moves more and below 1 moves less.

How it works Report a problem

Beta calculator

Enter your values below and press Calculate to see your result instantly.

Format: PortReturn, BenchReturn (per line)
Systematic Risk (Beta)
1.28
AGGRESSIVE
R-SQUARED (FIT)
0.94
Your portfolio moves 28% more than the benchmark. High leverage implied.

Beta measures one thing precisely: how much a stock tends to move when the overall market moves. A beta of 1 matches the market, above 1 amplifies it, below 1 dampens it. This calculator computes beta from a stock's and the market's returns, and explains the result.

How to use this calculator

  • Enter the stock's returns and the market's returns over the same periods (or their covariance and the market's variance).
  • Press calculate to see the beta.

Beta is about co-movement, not quality

A high beta is neither good nor bad; it is a temperament. Defensive investors hold low-beta stocks to sleep through storms, return-seekers accept high beta knowing falls will be amplified too. Beta also says nothing about a company's own fortunes: a superb firm can carry a sleepy beta, and a troubled one a wild ride.

Frequently asked questions

What is the beta formula?
Beta = covariance of the stock's returns with the market's returns, divided by the variance of the market's returns.
What does a beta of 1.5 mean?
The stock has tended to move 1.5% for every 1% the market moves, in the same direction: roughly 50% more volatile than the market.
Can beta be negative?
Yes, rarely. A negative-beta asset tends to rise when the market falls (some gold and hedging instruments behave this way at times), which makes it valuable insurance inside a portfolio.