Portfolio Beta Template

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Portfolio Beta Template

This portfolio beta template will help you calculate the weighted average beta of all of the stocks in your investment portfolio. Beta (β), as a measure of volatility relative to the market, is an important financial metric to consider to evaluate how an investor’s portfolio responds to the market.

Here is a quick preview of CFI’s portfolio beta template:

Portfolio Beta Calculator

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Beta and Financial Markets

Beta (β) is a measure of the volatility of returns with regards to the performance of the market. By observing beta, financial analysts try to link the performance of a stock to how well the stock market is doing. To further elaborate, a company with a higher beta is assumed to have a higher risk and higher returns.

The value of beta can be interpreted as follows:

  • β > 1: more volatile compared to the market
  • β = 1: exactly as volatile as the market
  • 0 < β < 1: less volatile compared to the market
  • β = 0: completely uncorrelated with the market
  • β < 0: negatively correlated with the market

For example, we can look at a high-risk technology firm which has a beta of 2. This is a firm that is more volatile than the market and will on average return significantly more than the market return is in a given period.

Additionally, Beta is an integral part of the Capital Asset Pricing Model (CAPM). The CAPM is used to calculate the expected return on a security. The formula for the CAPM is as follows:

CAPM Formula


Ra = Expected return of the security
Rrf = Risk-free rate
Ba = Beta (β) of the asset
Rm = Expected return of the market

You can see that beta is a multiplier to the market risk premium (Rm – Rrf) in this formula. Therefore, by examining the CAPM, we can deduce how a higher beta would result in higher returns if the market was performing well. However, we can also see how a high beta would result in lower or even negative returns if the market was performing poorly.

Use CFI’s portfolio beta template to calculate the beta of your entire portfolio!

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Analyst Certification FMVA® Program

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.


Financial Analyst certification curriculum


A well rounded financial analyst possesses all of the above skills!


Additional Questions & Answers

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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