What is the beta formula?

β = Cov(Rs, Rm) ÷ Var(Rm), using returns for the same periods.

Is beta the same as the regression slope?

Yes. Regressing stock returns on market returns gives a slope equal to this beta.

What does a beta of 1.5 mean?

The stock has tended to move 1.5% for each 1% move in the market, in the same direction.

Should I use daily, weekly or monthly returns?

Monthly returns over 3 to 5 years are the most common choice; daily data can be noisy for less-traded stocks.

Beta Formula and Calculator (Stock Beta)

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Beta Calculator (Stock vs Market)

Beta measures how much a stock tends to move when the market moves. It is the covariance between the stock’s returns and the market’s returns divided by the variance of the market’s returns. Equivalently, it is the slope of the regression line of stock returns on market returns, or the correlation between them multiplied by the ratio of their standard deviations.

Formula

β = Cov(R_s, R_m)Var(R_m) = ρ × σ_sσ_m

Where

β: beta of the stock
R_s: stock returns, one per period
R_m: market (index) returns for the same periods
Cov: covariance
Var: variance
ρ: correlation between the two return series

Calculator

Stock returns (%)

One return per period, in percent.

Market returns (%) for the same periods

Separate values with commas, spaces or new lines.

Result and step-by-step solution

Beta

1.4168

The stock has moved more than the market: about 1.42% for each 1% market move.

Mean returns
R̄_s = 0.9125%, R̄_m = 0.7%

Deviation products (in %²)

#	R_s	R_m	(R_s − R̄_s)(R_m − R̄_m)	(R_m − R̄_m)²
1	2.1%	1.5%	0.95	0.64
2	−1.5%	−0.9%	3.86	2.56
3	3.8%	2.6%	5.4863	3.61
4	0.9%	0.4%	0.0038	0.09
5	−2.7%	−2%	9.7538	7.29
6	4.2%	3.1%	7.89	5.76
7	1.3%	1.1%	0.155	0.16
8	−0.8%	−0.2%	1.5413	0.81

Covariance and market variance (divide by n − 1 = 7)
Cov = 4.234286 %²; Var(R_m) = 2.988571 %²
Divide
β = 4.2342862.988571 = 1.4168
Fit
Correlation ρ = 0.9939, R² = 0.9879 (share of the stock’s variance explained by the market)

How to use the formula

Paste the returns for the same periods, for example monthly returns for the stock and for an index such as the S&P 500. The calculator computes the mean of each series, the product of the deviations for each period, the sample covariance and the market variance, and then divides. It also reports the correlation and R², the share of the stock’s variance explained by the market.

In the eight-month example beta is 1.42: when the market has risen 1%, the stock has risen about 1.42% on average. A high R² (0.99 here) means the estimate is reliable; with a low R², beta says little. Data providers typically use 36 to 60 monthly returns. Plug beta into the CAPM for a required return, or into the Treynor ratio. The regression view is also available in the site’s linear regression calculator.

Frequently asked questions

What is the beta formula?: β = Cov(R_s, R_m) ÷ Var(R_m), using returns for the same periods.
Is beta the same as the regression slope?: Yes. Regressing stock returns on market returns gives a slope equal to this beta.
What does a beta of 1.5 mean?: The stock has tended to move 1.5% for each 1% move in the market, in the same direction.
Should I use daily, weekly or monthly returns?: Monthly returns over 3 to 5 years are the most common choice; daily data can be noisy for less-traded stocks.

Last reviewed: September 26, 2026. Calculations run in your browser and were checked against numpy-financial, SciPy and published spreadsheet examples.