Measurements such as portfolio beta … For example, when an investment manager believes the market is about to rise, she may adjust the portfolio's beta higher to create additional upward price sensitivity for portfolio holdings. Generally, you would use the Index to which the stock belongs to, to calculate the Beta. Because this is a forecast, the accuracy of the CAPM results are only as good as the ability to predict this variable for the specified period . Since the broad market has a beta coefficient of 1, a portfolio beta of less than 1 means that the portfolio has lower systematic risk than the market and vice versa.


So, a Beta of 1.5 that if the market portfolio moves by 1%, the stock could likely move by 1.5%. Formula for Calculating Portfolio Beta. Calculating the volatility, or beta, of your stock portfolio is probably easier than you think.

The beta of a portfolio is the weighted sum of the individual asset betas, According to the proportions of the investments in the portfolio. The beta of market portfolio is: A.+ 1.0 B.+0.5 C.0 D.-1.0 Answer Key: A Question 10 of 15 1.0/ 1.0 Points The distribution of returns, measured over a short interval of time, like daily returns, can be approximated by: A.Normal distribution B.Lognormal distribution. Portfolio beta Used in the context of general equities. A beta of 1 means that a portfolio's volatility matches up exactly with the markets.

In MarketXLS, the default =StockBeta uses the ETF SPY to calculate the Beta. E.g., if 50% of the money is in stock A with a beta of 2.00, and 50% of the money is in stock B with a beta of 1.00,the portfolio beta is 1.50. A portfolio is any group of investment assets that an individual or organization holds. The concept of investment timing requires the adjustment of portfolio beta prior to market moves. As with individual assets, understanding the risk and possible returns of a portfolio is key to making informed investment decisions. The beta of a portfolio is the weighted average of the individual asset betas where the weights are the portfolio weights.
Formula Portfolio Beta = (the sum of) £ {weight of security X Beta of security} So, investors can construct portfolios with whatever beta they want, since all the information they need is the betas of the underlying assets. Beta of the asset (β a), a measure of the asset's price volatility relative to that of the whole market Expected market return (r m ), a forecast of the market's return over a specified time. Portfolio beta is an important input in calculation of Treynor's measure of a portfolio.