Finding Beta Research Guide

Finding Beta Using Bloomberg Professional

Enter this command to look up the beta of a stock:Tip: Bloomberg gives you the most flexibility when trying to figure out the beta of a stock.

{ticker symbol} Equity button BETA Go button

Example: The following screenshot shows the result for the beta of Goldman Sachs.

GS Equity button BETA Go button

Screenshot of Bloomberg terminal

 

The graph above shows the regression plotted. The independent variable (the index) is on the x-axis and the dependent variable (the stock price) is on the y-axis. The latest observation is shown by a flashing red dot.

The beta is leveraged if the firm has had long-term debt on its balance sheet for the past two fiscal years. You can check to see if the firm has long-term debt by using the command:

{ticker symbol} Equity button DES9 Go button

Bloomberg reports both the Adjusted Beta and Raw Beta. The adjusted beta is an estimate of a security's future beta. It uses the historical data of the stock, but assumes that a security’s beta moves toward the market average over time. It weights the historic raw beta and the market beta.  The formula is as follows:

Adjusted beta = (.67) * Raw beta + (.33) * 1.0

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Other Data Reported

Alpha:
The point of intersection with the y-axis.

R2:
The coefficient of determination (r-squared). This is the percentage (in decimal form) or variance in the dependent variable (the stock) that can be explained by the independent variable (the index).

Standard Deviation of Error:
The degree to which an individual probability value varies from the distribution mean.

Standard Error of Beta:
A 67% confidence level (or one standard deviation from the mean) that this: Actual Beta = Raw Beta +/- the standard error

Number of Points:
Indicates the number of observations used to calculate beta (the more, the better).