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Finding Beta Research Guide  

Last Updated: Mar 25, 2014 URL: http://libguides.babson.edu/beta Print Guide RSS Updates

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Data Finders

Click on a Data Finder pdf below to get instructions, including screen shots.

 

What is Beta?

Beta (β) is a measure of volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole. (Most people use the S&P 500 Index to represent the market.)

Beta is also a measure of the covariance of a stock with the market. It is calculated using regression analysis.

  • A beta of 1 indicates that the security's price is expected to move with the market.
  • A beta greater than 1 indicates that the security's price is expected to be more volatile than the market.
  • A beta of less than 1 indicates that the security's price is expected to be less volatile than the market.


You can think of beta as the tendency of a security's returns to respond to swings in the market. For example, if a stock's beta is 1.2, then it is theoretically 20% more volitile than the market.

Use Cutler Center Resources to...Look Up Beta

There are several different ways to find beta using the resources at the Cutler Center. Each resource will provide you with varying results for the beta of a security due to differences in the calculations used in each program. These issues are addressed in this guide.

Use Cutler Center Resources to...Calculate Beta

Pull the time series data from WRDS to calculate Beta yourself. See Calculating Beta tab for instructions.

Mgr. Library and Cutler Ctr Research/Instruction

 
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