Beta-Formula-Excel-Template
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kapil gargBeta-Formula-Excel-Template
Uploaded by
kapil gargBeta Excel Template
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Benchmark Percentage of Percentage of Change
Date Assets Price
Price Change in Asset in Benchmark
1-Jan-18 232 1274 0.92 0.15
1-Feb-18 446 1460 -0.34 -0.24
1-Mar-18 294 1110 0.09 0.24
1-Apr-18 321 1376 1.27 -0.04
1-Jun-18 730 1316 -0.11 -0.01
1-Jul-18 648 1300 0.08 0.04
1-Aug-18 703 1351 0.04 0.03
1-Sep-18 728 1396 -0.05 0.03
1-Oct-18 689 1440 -0.68 -0.2
1-Nov-18 220 1148 1.71 0.09
1-Dec-18 597 1247 -1 -1
Variance is Calculated as:
Variance 0.6653
Covariance is Calculated as:
Covariance 0.16440
Beta is Calculated as:
Beta = Covariance (Re, Rm) / Variance (Rm)
Beta 0.2471
Suppose an investor wants to invest in a company, he wants to calculate Beta
of the company and compare it with S&P 500 EFT Trust correlation between
two is 0.62, the standard deviation of returns of the company is 22% and standard
deviation of returns of S&P is 30%.
Correlation between company and S&P 500 0.62
Standard deviation of returns of company 22%
Standard deviation of returns of S&P 30%
Beta Using correlation formula is calculated as:
Beta = Correlation(Ra – Rm) *( σe / σm)
Beta 0.45
A company gave risk free return of 5%, the stock rate of return is 10%
and the market rate of return is 12% now we will calculate Beta for same.
Risk Free Return 5%
Stock's Rate of Return 10%
Market's Rate of return 12%
Return on risk taken on stocks is calculated
Return on risk taken on stocks = Stock Rate of Return – Risk Free Return
Return on risk taken on stocks 5%
Return on risk taken on Market is calculated using below formula
Return on risk taken on Market = Market Rate of Return – Risk Free Return
Return on risk taken on market 7%
Beta is Calculated using below formula
Beta = Return on risk taken on stocks/ Return on risk taken on Market
Beta 0.71
An investor has a portfolio of $100,000, the market value of HCL is $40,000
with a Beta value of HCL is 1.20, and market value of Facebook is $60,000
with Beta value is 1.50. The beta of the portfolio will be:-
Portfolio Value $ 100,000.00
Beta value of HCL $ 40,000.00
Market value of HCL 1.2
Beta value of Facebook $ 60,000.00
Market value of Facebook 1.5
Weight of HCL is calculated as:
Weight of HCL 0.4
Weight of Facebook is calculated as:
Weight of Facebook 0.6
Beta of Portfolio is calculated as:
Beta of Portfolio 1.38
