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Beta Calculator

Enter the stock and market percentage changes to get the beta.

How it is calculated

Enter the percentage change of the stock and the percentage change of the market index over the same period. The tool divides one by the other: β = stock change % / market change % and shows two decimals. Because both are percentages, the percent signs cancel and you type plain numbers, for example 9 and 6.

This is a single-period beta from one pair of returns. It is not the regression slope against many returns that data providers publish, so it can differ a lot from a reported beta. The market change cannot be zero, otherwise there is no result. Negative values are allowed: both falling gives a positive beta, and a rising market with a falling stock gives a negative one. It does not use a risk-free rate or any adjustment.

Worked example

Over one month the stock rose 9% while the market index rose 6%. Beta = 9 / 6 = 1.50. The stock moved one and a half times as much as the market, so on this one observation it amplified market moves. If instead the stock had fallen 6% while the market fell 5%, the result would be 1.20, still above 1.

Try this example →

Common mistakes

  • Using the stock’s price instead of its percentage change. Beta needs a return over the period, not a price level.
  • Comparing different periods, such as a stock’s monthly change against the market’s yearly change. Both must cover the same dates.
  • Treating one month as a stable beta. A single pair of returns is noisy, and a real beta is usually estimated over many periods.
  • Entering the market change as zero or leaving it blank. The ratio is undefined and the tool returns nothing.
  • Reading a negative beta as an error. It means the stock moved opposite to the market in that period, which can happen by chance in one observation.

Sources

About this calculator

Beta (β) measures a stock's sensitivity to overall market moves, and it's a central input to the Capital Asset Pricing Model (CAPM) used across finance to estimate a stock's expected return and cost of equity. This calculator derives a simplified single-period beta directly from the stock's percentage change relative to the market's percentage change over the same period.

A beta of exactly 1 means the stock tends to move in lockstep with the market; beta above 1 means the stock amplifies market moves (more volatile, more risk and more potential reward), while beta below 1 means it dampens them (more defensive). Investors and portfolio managers use beta to gauge how much a stock adds to overall portfolio volatility and to size positions accordingly — note that professionally reported betas are usually computed via regression over many periods rather than a single pair of returns.

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Comments (1)

  • Editorial team

    Results swing wildly when the market barely moved. If the index gained 0.2 and the stock gained 1, the ratio is 5.00, which says more about a quiet period than about the stock. Choose a period where the market made a clear move, and repeat the calculation for several periods to see whether the values agree. Which index do you measure your stocks against?

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