Finance
Calculate a stock's beta
=SLOPE(B2:B6,A2:A6)How it works in Excel
- B2:B6 holds the stock's returns.
- A2:A6 holds the market's returns.
- SLOPE shows how much the stock moves per unit of market move.
- A beta of 1 moves with the market, and above 1 moves more.
- Use returns, not prices.
- INTERCEPT gives the other part of the line.
The idea in general
It measures how strongly a stock reacts when the whole market moves.
What I assumed
- The market returns are in A2:A6 and the stock returns are in B2:B6.
Check the result on your own data before relying on it.