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How to Calculate Beta in Excel.
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How to Calculate Beta in Excel.

Rosemary Njeri

Beta is a measure of a stock’s volatility in relation to the overall market.

The beta for a stock describes how much the stock’s price moves in relation to the market.

It’s generally used as both a measure of systematic risk and a performance measure.

Formula to calculate beta in excel.

  • Download the historical prices for the stock and the benchmark index.
  • Then calculate the percentage returns for both the stock and the index.
  • Calculate Stock’s Beta using the formula to calculate beta.

β = Covar(rs , rm)/Var rm

Example:

Suppose your data in an excel spreadsheet is as follows.

Calculate Beta in Excel.

We will then calculate the percentage change in assets and the benchmark price.

Calculate Beta in Excel.
  • Find the variance of the percentage change in assets using the variance function VAR.S.
  • Then find the covariance of the percentage change in benchmark using the covariance function COVARIANCE.S.
Calculate Beta in Excel.

Then divide the covariance by the variance to get the beta.

 Calculate Beta in Excel.

Therefore, the beta is 2.744197874.

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