🧰 UtlKit

Beta Calculator

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Tool: Beta Calculator · /tools/beta-calculator/

What is this tool?

Beta calculator computes the systematic risk coefficient of a stock relative to the market portfolio. Beta measures how much a stock's returns move compared to the overall market. A beta of 1 means the stock moves with the market, above 1 means more volatile, below 1 means less volatile.

How to use

  1. 1

    Input return data

    Enter stock and market return series or use quick estimation.

  2. 2

    Calculate metrics

    Compute Beta, Alpha, R-squared, and volatility.

  3. 3

    Interpret results

    Understand risk profile and expected behavior.

Frequently Asked Questions

What does Beta > 1 mean?

The stock is more volatile than the market. It tends to amplify market moves both up and down.

What is Alpha?

Alpha represents the excess return beyond what Beta explains. Positive Alpha means outperformance.

Is Beta constant over time?

No, Beta changes as company fundamentals and market conditions evolve. Recalculate periodically.

How is Beta calculated?

In sequence mode, enter stock and market return series (minimum 3 paired observations). Beta = Covariance(stock, market) / Variance(market) using population (÷n) covariance and variance. The calculator also derives Alpha = Stock mean - (Risk-free rate + Beta × (Market mean - Risk-free rate)) and the regression R². In quick mode, Beta = Correlation × (Stock volatility / Market volatility).

What does a beta of 1.5 mean?

Beta measures a stock's sensitivity to the market: a beta of 1.5 means it has historically moved about 1.5x the market - up 15% when the market rose 10%, down 15% when it fell 10%. Beta 1 matches the market; below 1 is defensive. It is an estimate from past covariance, so it drifts over time.

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