Beta Calculator

Calculate stock beta β€” a measure of how much a stock's price moves relative to the overall market, indicating its systematic risk.

BETA (Ξ²)

1.5

High volatility β€” amplifies market moves.

πŸ’‘ Understanding Beta: Systematic Risk in Portfolio Theory

Beta (Ξ²) measures a stock's sensitivity to market movements. A beta of 1.0 means the stock moves in lockstep with the market. A beta of 1.5 means the stock is 50% more volatile β€” when the market rises 10%, the stock tends to rise 15%, and when the market falls 10%, the stock tends to fall 15%.

Beta is a cornerstone of Modern Portfolio Theory and the Capital Asset Pricing Model (CAPM). It captures systematic risk β€” the portion of a stock's risk that cannot be diversified away. Low-beta stocks (utilities, consumer staples) provide stability; high-beta stocks (tech, biotech) offer higher potential returns with greater risk.

Stock return 15% when market returned 10% β†’ Implied Beta = 1.5. This stock amplifies market moves by 50%. In a bull market, this is rewarding; in a bear market, losses are magnified equally.

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