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Stock Beta — How Wild Is Your Stock? — Smart Financial Analysis

Measure stock volatility relative to the market. Beta is the key input for CAPM and portfolio risk. Compare famous betas: Tesla (roller coaster), Walmart (steady ship), utilities (sleeping giant).

Concept Fundamentals

Core Concept

Stock Beta Calculator — How Wild Is Your Stock?

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Industry Standard

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Beta measures a stock's sensitivity to market movements. Beta = Covariance(Stock Returns, Market Returns) / Variance(Market Returns). High beta (>1) stocks amplify market moves — Tesla (~2.0) swings twice as much as the S&P 500. Beta captures systematic (market) risk — the portion of risk you cannot diversify away.

Key figures

Core Concept

Stock Beta Calculator — How Wild Is Your Stock?

Stocks fundamental

Benchmark

Industry Standard

Compare your results

Proven Math

Formula Basis

Established methodology

Expert Verified

Best Practice

Professional standard

Ready to run the numbers?

Why: Beta measures a stock's sensitivity to market movements. Beta = Covariance(Stock, Market) / Variance(Market). Beta 1.0 means the stock moves exactly with the market. Tesla&...

How: Enter Stock Returns (%), Market Returns (%), Risk-Free Rate (%) to get instant results. Try the preset examples to see how different scenarios affect the outcome, then adjust to match your situation.

Beta measures a stock's sensitivity to market movements.Beta = Covariance(Stock Returns, Market Returns) / Variance(Market Returns).

Sources:InvestopediaFederal Reserve

Run the calculator when you are ready.

Calculate Stock Beta — How Wild Is Your Stock?Enter your values below

⚡ Quick Examples — Click to Load

Inputs

Stock Returns (%)

Market Returns (%)

Risk-Free Rate (%)

Number of Periods

Debt-to-Equity

Tax Rate (%)

beta_analysis.sh

$ calculate_beta --returns="5.2,-3.1,2.4,8.1,-1.5,4.3,6.2,..."

Beta

2.03

Expected Return (CAPM)

253.1%

Unlevered Beta

1.45

Risk Classification

Very High

Volatility vs Market

103% more volatile than market

Bear Market Stress (-20%)

-40.6%

Alpha

0.11%

Correlation

0.98

📊 Beta Comparison by Stock

📈 Stock vs Market Returns (Beta Slope)

📊 Beta Spectrum (Low to High)

📈 Risk-Return Trade-off

For educational purposes only — not financial advice. Consult a qualified advisor before making decisions.

💡 Money Facts

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Stock Beta — How Wild Is Your Stock? analysis is used by millions of people worldwide to make better financial decisions.

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Beta measures a stock's sensitivity to market movements. Beta = Covariance(Stock, Market) / Variance(Market). Beta 1.0 = moves exactly with market. Tesla's beta of ~2.0 means it amplifies market moves by 2×. In CAPM: Expected Return = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate). High beta stocks offer higher expected returns but with more risk. During the 2008 crisis, high-beta stocks fell 60%+ while low-beta stocks fell only 25-30%. The S&P 500 always has a beta of exactly 1.0 by definition. Utilities average beta ~0.4 while tech averages ~1.3.

2.0

Tesla Beta (2× Market Volatility)

0.5

Walmart Beta (Defensive)

60%+

High-Beta Losses in 2008

1.0

S&P 500 Beta (By Definition)

Sources: CRSP, Bloomberg, Yahoo Finance, CFA Institute.

Key Takeaways

Beta > 1 = more volatile than market; < 1 = less volatile; = 0 = no correlation
CAPM Expected Return = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate)
High beta doesn't mean high returns — it means high risk-adjusted returns
Sector betas: Utilities 0.3-0.6, Tech 1.2-1.8, Biotech 1.5-2.5

Did You Know?

Tesla's beta is 2.0 — it moves twice as much as the S&P 500 (Bloomberg)
Berkshire Hathaway's beta is only 0.5 — Buffett deliberately reduces volatility (Berkshire)
The S&P 500's beta is exactly 1.0 by definition (it IS the benchmark) (Standard & Poor's)
Negative beta stocks (like gold miners) go UP when the market crashes (World Gold Council)
William Sharpe won the 1990 Nobel Prize for the CAPM which uses beta (Nobel Committee)
During COVID crash (March 2020), high-beta stocks fell 45% vs low-beta at 20% (Bloomberg)

How It Works

The Beta Formula

β = Covariance(stock returns, market returns) / Variance(market returns)

CAPM and Expected Return

E(r) = Rf + β × (Rm - Rf). Higher beta drives higher required return to compensate for systematic risk.

Alpha: Beating Your Beta-Adjusted Return

Alpha = Actual Return - (Beta × Market Return). Positive alpha means you outperformed your risk-adjusted benchmark.

Sector and Style Betas

Different sectors have characteristic betas. Utilities and staples are low; tech and biotech are high. Use sector benchmarks when estimating beta for new companies.

Expert Tips

Use 2–5 Years of Data

Monthly returns over 2–5 years give more reliable beta estimates than short windows.

Compare Unlevered Beta

Use unlevered beta when comparing companies with different debt levels.

Check the Benchmark

Betas vary by benchmark (S&P 500 vs Russell 2000). Always note which index was used.

Stress-Test Downside

If market drops 20%, a β=1.5 stock typically drops ~30%. Use beta to model bear scenarios.

Beta by Sector

Sector	Avg Beta	Volatility	Example Stock
Utilities	0.3–0.6	Low	NEE, DUK
Consumer Staples	0.5–0.8	Low	KO, PG
Healthcare	0.7–1.0	Low–Medium	JNJ, UNH
Tech	1.2–1.8	High	AAPL, NVDA
Biotech	1.5–2.5	Very High	MRNA, BIIB

Frequently Asked Questions

What is beta in stocks?

Beta measures a stock's sensitivity to market movements. Beta = Covariance(Stock, Market) / Variance(Market). Beta 1.0 means the stock moves exactly with the market. Tesla's beta of ~2.0 means it amplifies market moves by 2×. In CAPM: Expected Return = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate).

What is the beta formula (CAPM)?

Beta = Covariance(Stock Returns, Market Returns) / Variance(Market Returns). The CAPM uses beta to price risk: Expected Return = Rf + β × (Rm - Rf). Higher beta demands higher expected return to compensate for systematic risk.

High beta vs low beta stocks?

High beta (>1) stocks amplify market moves — Tesla (~2.0) swings twice as much as the S&P 500. Low beta (<1) stocks are defensive — Walmart (~0.5) moves half as much. During the 2008 crisis, high-beta stocks fell 60%+ while low-beta fell only 25-30%.

How does beta relate to systematic risk?

Beta captures systematic (market) risk — the portion of risk you cannot diversify away. Unsystematic risk is company-specific and can be diversified. CAPM says you are only compensated for systematic risk. R² shows what % of a stock's variance is explained by the market.

What are negative beta stocks?

Negative beta means the stock tends to move opposite the market. Some gold miners have beta -0.3 — they go UP when the market goes DOWN. Gold ETFs often have beta ~0.0 (uncorrelated). These act as portfolio insurance during downturns.

How do you calculate portfolio beta?

Portfolio beta = weighted average of component betas. Example: 60% stocks β=1.2 + 30% bonds β=0.3 + 10% gold β=0.0 → Portfolio β = 0.6×1.2 + 0.3×0.3 + 0.1×0 = 0.81. Adding low-beta assets reduces portfolio volatility.

Key Statistics

2.0