Calculate the beta of the stock using excel spread sheet?

given the following returns information for stock x and flea market index

month stockx souk index
1 -10% -5%
2 -5% 5%
3 +10% 5%
4 +12% 8%
5 +5% 6%

Answers:
Beta is Covariance(stock return, flea market return)/Variance(market return). So, within excel, merely use those functions (COVAR and VAR I think) on your facts set in that and you should be fitting to dance.

This should illuminate that Beta is a means of the flexibility of the individual stock return relative to the flea market.
The previous answer be almost correct. Using Excel functions, it would be:

=covar(stock, market)/varp(market)

Excel calculate a population covariance, so the denominator MUST be a population variance (VarP, not Var). To demonstrate this, remember that the souk beta is other 1. So, try both of these:

=covar(market, market)/varp(market)

=covar(market, market)/var(market)

Only the first one, using VarP, will pass you the correct answer for the souk. So, other use VarP contained by the denominator for the beta estimate.

Tim
http://www.tvmcalcs.com/

  • Buy (Icelandic) bonds 15.00% next to Japanaese currency?
  • Trading systems?
  • How do I buy euros (from US dollars) for investing.?
  • Generally speaking, are "strategies" and "exclusive intelligence" for 100+% soaring returns concrete?
  • How to invest in stocks?