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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.
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What does BETA indicate?
Beta is a measure of a stock's volatility. The price of a stock with a beta of 1.0 rises and falls on average with the overall market. A beta greater than 1.0 could mean larger prices fluctuations, and a beta of less than 1.0 indicates a more tame stock. For example, if Company A has a beta of 1.2 and the market goes up 10% in a given period of time then Company A should increase about 12% in value. If the market falls 20% then Company A's stock price should drop 24%.
Is the beta of a stock static or dynamic?
The Beta of a stock is always dynamic.
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.
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.
Are beta blockers legal?
figure it out
How do you figure out beta decay of molecule?
Beta decay is a property of atoms not molecules.
Beta?
In my last post I discussed an investment metric known as alpha. Alpha is a gauge of risk-adjusted returns provided by a portfolio manager. Alpha isn’t the only measure of a stock or portfolio’s risk profile. Another one is called beta. Beta measures a stock’s volatility in comparison to the overall market. A beta value of 1 is assigned to the overall market. So a stock that has a beta of one would be considered to move in lockstep with the overall market. If the market were to go up by 10%, the stock should also move by the same amount in the same direction. A stock that moves less than the overall market would have a beta less than one. A beta greater than one indicates a stock that moves in the same direction as the overall market but in more extreme swings. Beta can be a good figure to use in rule-of-thumb investment decisions but it does have one serious drawback of which investors should be aware. Beta is calculated based on historical price movements relative to the market. Because of this method of calculation it doesn’t take into account any new information about the underlying fundamentals of the company. Due to this limitation, beta should never be used in a vacuum. Remember, statistics like alpha and beta can provide guideposts to help you evaluate an investment manager or the risk of a particular stock but they shouldn’t be relied upon to replace the hard work of fundamental analysis. It is the key things going on with a company’s balance sheet and income statement that are the true underpinnings of the stock’s valuation. Keep this in mind when evaluating stocks or portfolios and you’ll be in good shape. I’m not saying that statistics like alpha and beta should be ignored; they’re great tools. Just don’t let them be the only tools you use when making investment decisions.
If a stock has a beta equal to one?
A beta of 1 indicates that the security's price will move with the market.
Where and how do you get beta values for Indian companies?
Look up Bombay Stock Exchange www.bseindia.com and Nantional Stock Exchange www.nseindia.com for beta values of Indian companies.
If a stock has a beta of 1.2 what does that mean?
If market rises by 100% then the stock rises by 120%
What was the joint stock company that started Virginia?
the London stock company was a 'joint' stock company with the Virginia stock company
If the risk-free rate is .06 and expected return on the market is .13. What is the requred rate of return on a stock that has a beta of 7?
49%....in reality no stock has a beta of 7
