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This beta calculator allows you to measure the volatility of returns of an individual stock relative to the entire market.
Below is a screenshot of the beta calculator:
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The beta (β) of an investment security (i.e. a stock) is a measurement of its volatility of returns relative to the entire market. It is used as a measure of risk and is an integral part of the Capital Asset Pricing Model (CAPM). A company with a higher beta has greater risk and also greater expected returns.
Follow these steps to calculate β in Excel:
Obtain the weekly prices of the stock
Obtain the weekly prices of the market index (i.e. S&P 500 Index)
Calculate the weekly returns of the stock
Calculate the weekly returns of the market index
Use the Slope function and select the weekly returns of the market and the stock – each as their own series
The output from the Slope function is the β
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Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
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CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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