Beta: Estimating Beta from Matched Returns
Beta uses paired asset and market returns to measure their historical relationship. Every observation should refer to the same period on both sides.
Use the Beta Calculator to enter your own figures and compare the result with the worked example below.
Beta formula
β = Cov(asset return, market return) ÷ Var(market return)
Worked example
| Item | Example value |
|---|---|
| Asset returns (%) | 2,4,-1,5 |
| Market returns (%) | 1,3,-2,4 |
| Beta | 1 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Changing the benchmark or sample window can change beta. A historical estimate is not a guarantee about future market sensitivity.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.