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You need to use the variance and covariance functions in Excel
1. Calculate the covariance of the stock returns with respect to an index
2. Calculate the variance of the index
3. Divide the first number by the second.
See the related link for a spreadsheet
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∙ 12y ago
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How do you calculate Beta for a stock?
Using Excel: plot the benchmark returns against the stock returns. add a linear trendline and display the equation Beta is the slope of the trendline. Examine the spreadsheet in the related link for a worked example
How do you calculate treynor ratio in Excel?
calculate the effective return (mean return minus the risk free rate) divided by the beta. the excel spreadsheet in the related link has an example.
How do you calculate beta in mutual funds?
Check out these websites: http://faculty.babson.edu/academic/Beta/CalculateBeta.htm http://www.money-zine.com/Investing/Stocks/Stock-Beta-and-Volatility/
Is the beta of a stock static or dynamic?
The Beta of a stock is always dynamic.
How is beta determined for a stock?
You'll need a spreadsheet like Excel. Do the following. 1) Get percentage daily returns for the stock between two dates (I suggest every day for a year). You can get this historical data from Yahoo Finance 2) Pick a benchmark index 3) Get percentage daily returns for the index between the two dates as well 4) Calculate the covariance of the stock with respect to the index and divide by the variance of the stock [the two excel functions you'll need are covariance.p() and variance.p() ] Go to the related link below for a spreadsheet to do this.
How do you figure beta for a company stock?
First decide what the benchmark index is (i.e the FTSE, DOW Jones, commodities index etc). Then plot the benchmark returns against the stock returns. Then add a straight line of best fit. The beta is the slope of the trendline Check out the Excel spreadsheet in the related link.
Why is beta the correct measure of a stock riskiness?
Beta measures a stock's volatility (the swings up and down in price). The market as a whole has a beta of 1.0, but each stock is determined a beta value from a history of it's stock movements. Riskiness equates to the stock losing value and high beta stocks are more prone to falling faster.
How do you calculate Beta by using Variance and Covariance?
You can use the slope function on excel which takes a cell range representing the Y-Variable and another cell range representing the X-Variables. For instance the Y-Variable may be a column of excess returns for a stock and the X-Variable maybe the column of risk premia.
What would make a firm's beta increase?
The beta of a firm's stock is dependent on the volatility of the stock relative to the overall market. So if the stock's volatility increased relative to the overall market, it's beta would increase as well.
What is the formula to calculate beta DC?
beta dc= ic/ib!!
How do you calculate a beta?
It is impossible to calculate a Betta. A Betta is a fish.
How do you calculate beta of debt?
Nice
