How to Calculate Beta To calculate the beta of a stock, you need historical price data for both the stock and the market index.

Beta is a way to quantify a stock’s systematic risk. In simple terms, systematic risk refers to investment risk related to the movement of the entire market. Beta can help you answer questions like, ...

Portfolio beta is the measure of an entire portfolio’s sensitivity to market changes while stock beta is just a snapshot of an individual stock’s volatility.

Finally, calculate the variance of the index (derived from the index daily price changes to show how they are distributed around the average), and divide the covariance by the variance.

Learning how to calculate your portfolio beta can help you manage risk and maximize your profit potential. Find Out More.

Alpha measures an investment's return relative to a benchmark, while beta measures risk. Find out how these two metrics can help you pick investments that match your risk/return profile.