Portfolio Beta Template

Download our free portfolio beta template

Over 2 million + professionals use CFI to learn accounting, financial analysis, modeling and more. Unlock the essentials of corporate finance with our free resources and get an exclusive sneak peek at the first module of each course. Start Free

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

Download the Free Template

Enter your name and email in the form below and download the free template now!

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

Where:

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!

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentations, and Word document templates.

Additional Resources

CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or looking for a career change, the CFI website has many free resources to help you jumpstart your Career in Finance. If you are seeking to improve your technical skills, check out some of our most popular courses. Below are some additional resources for you to further explore:

The Financial Modeling Certification

Analyst Certification FMVA® Program

CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or looking for a career change, the CFI website has many free resources to help you jumpstart your Career in Finance. If you are seeking to improve your technical skills, check out some of our most popular courses. Below are some additional resources for you to further explore:

The Financial Modeling Certification

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:

 

Excel Tutorial

CFI is a global provider of financial modeling courses and of the FMVA Certification. CFI’s mission is to help all professionals improve their technical skills. If you are a student or looking for a career change, the CFI website has many free resources to help you jumpstart your Career in Finance. If you are seeking to improve your technical skills, check out some of our most popular courses. Below are some additional resources for you to further explore:

The Financial Modeling Certification

Launch CFI’s Excel Course now

to take your career to the next level and move up the ladder!

0 search results for ‘