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Management Trainee

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What are the different types of formula to calculate Beta
From India , Bangalore
It is a risk measure and not a return measure. Taking market risk = 1, a beta of > 1 means the portfolio has a greater risk than the market and vice versa. Surya

Beta measures a stock's volatility, the degree to which its price fluctuates in relation to the overall market. In other words, it gives a sense of the stock's market risk compared to the greater market. Beta is used also to compare a stock's market risk to that of other stocks.
This measure is calculated using regression analysis. A beta of 1 indicates that the security's price tends to move with the market. A beta greater than 1 indicates that the security's price tends to be more volatile than the market, and a beta less than 1 means it tends to be less volatile than the market.
The formula using covariance and variance stated above can very rightly be used to calculate beta.
further, if you are using MS EXCEL, you can use the formula for "SLOPE" for the market return and the portfolio return as beta is nothing but the slope of the regression line.
regards
Aseem Srivastava :)

From India , Mumbai
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