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
To calculate the portfolio beta by weighting individual stock's betas, you would multiply each stock's beta by its weight in the portfolio, and then sum up these values to get the overall portfolio beta.
Check out these websites: http://faculty.babson.edu/academic/Beta/CalculateBeta.htm http://www.money-zine.com/Investing/Stocks/Stock-Beta-and-Volatility/
The Beta of a stock is always dynamic.
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
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.
You can use Beta to measure market volatility because of beta is the elasticity of a stock change as a result of a change in the market. That is, Beta of a sotck is found by comparing the senstivity of a stock's return to the fluctuations in the market.Beta is found by dividing the product of the covwariances of the stock and market retun by the variance of the market.The bench marks of betas are as followed:a risk free investment such as a Tbill (that is guaranteed a return) will have a beta of 0.A portfolio with risk equivalent to the market has a beta of 1.Given those two bench mark, you can gauge at the volatility of the stock/investment by comparing its beta with those two extremes.
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.
beta dc= ic/ib!!
It is impossible to calculate a Betta. A Betta is a fish.
Nice
A beta of 1 indicates that the security's price will move with the market.
Look up Bombay Stock Exchange www.bseindia.com and Nantional Stock Exchange www.nseindia.com for beta values of Indian companies.