Beta Calculator

Measure how much a holding moves relative to the market, and the market risk it contributes.

About Beta Calculator

Beta is the slope of a regression of the asset against the market. Feeding it into the capital asset pricing model gives the return the market would require for that level of systematic risk. Beta measures only market risk, so a high-beta holding in a diversified portfolio is a very different proposition from the same holding held alone.

Formula

Beta

Beta = covariance with the market ÷ variance of the market

beta: Sensitivity to market moves, where 1.0 matches the market exactly

Worked example

With the default values below, Beta Calculator returns Beta of 1.3314. Change any input above and every figure here is recalculated in your browser.

Inputs used

Covariance with the marketaccepts -1–1: 0.0225
Variance of the marketaccepts 0–1: 0.0169
Market returnaccepts 0–100 %: 9 %
Risk-free rateaccepts 0–100 %: 4 %

Results

Beta: 1.3314
Expected Return From the Capital Asset Pricing Model: 10.657%
Interpretation: More volatile than the market — amplifies both directions

Step by step

1Values used
2Beta
3Beta= 1.3314
4Expected Return From the Capital Asset Pricing Model= 10.657
5Interpretation= More volatile than the market — amplifies both directions

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Beta calculated?

Beta = covariance with the market ÷ variance of the market Beta is the slope of a regression of the asset against the market. Feeding it into the capital asset pricing model gives the return the market would require for that level of systematic risk.

Why does Beta matter?

Beta measures only market risk, so a high-beta holding in a diversified portfolio is a very different proposition from the same holding held alone.

What values do I need to enter?

This calculator takes 4 inputs: Covariance with the market, Variance of the market, Market return, Risk-free rate. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.