how to calculate beta

There are two ways to calculate:Inevitably, there are also disadvantages to doing it yourself. Calculation beta in Excel is easy. The beta of a stock is a measure of its price volatility in comparison to the volatility of the market. it is a vital step in the component selection process. By using our site, you agree to our.For Part 2, point number 3, how did you come up with the beta of 1.5 to use in the formula?That's just an example chosen for demonstration purposes. {"smallUrl":"https:\/\/www.wikihow.com\/images\/thumb\/8\/8d\/Calculate-Beta-Step-1-Version-4.jpg\/v4-460px-Calculate-Beta-Step-1-Version-4.jpg","bigUrl":"\/images\/thumb\/8\/8d\/Calculate-Beta-Step-1-Version-4.jpg\/aid1309643-v4-728px-Calculate-Beta-Step-1-Version-4.jpg","smallWidth":460,"smallHeight":345,"bigWidth":"728","bigHeight":"546","licensing":"

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\n<\/p><\/div>"},Using Beta to Determine a Stock's Rate of Return,{"smallUrl":"https:\/\/www.wikihow.com\/images\/thumb\/c\/cb\/Calculate-Beta-Step-6-Version-4.jpg\/v4-460px-Calculate-Beta-Step-6-Version-4.jpg","bigUrl":"\/images\/thumb\/c\/cb\/Calculate-Beta-Step-6-Version-4.jpg\/aid1309643-v4-728px-Calculate-Beta-Step-6-Version-4.jpg","smallWidth":460,"smallHeight":345,"bigWidth":"728","bigHeight":"546","licensing":"

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\n<\/p><\/div>"}.To learn how to use beta to determine a stock's rate of return, scroll down!http://www.money-zine.com/Investing/Stocks/Stock-Beta-and-Volatility/,https://www.investopedia.com/terms/r/rateofreturn.asp,http://www.investopedia.com/articles/financial-theory/09/calculating-beta.asp,http://www.valueline.com/Tools/Educational_Articles/Stocks/Using_Beta.aspx#.XPkgpqgkkuU,https://www.investopedia.com/terms/r/risk-freerate.asp,https://www.investopedia.com/terms/r/requiredrateofreturn.asp,https://www.investopedia.com/ask/answers/102714/how-do-you-calculate-beta-excel.asp,http://investexcel.net/367/calculate-stock-beta-with-excel,http://faculty.babson.edu/academic/Beta/CalculateBeta.htm,https://corporatefinanceinstitute.com/resources/knowledge/valuation/what-is-beta-guide/,consider supporting our work with a contribution to wikiHow.Either or both of these values may be negative, meaning that investing in the stock or the market (index) as a whole would mean a loss during the period.