Let’s say the covariance of the S&P 500’s return to AAPL’s returns is 0.032, which is then divided by the average market return’s variance of 0.0235 to give a beta of 1.36. The formula ...

Beta Formula. Beta = Covariance of a Stock’s Return With Market’s Return / Market Variance. How to Calculate Beta (Example: Apple and S&P 500) ...

There are two ways to determine beta. The first is to use the formula for beta, which is calculated as the covariance between the return (r a) of the stock and the return (r b) of the index ...

Reviewed by Andy Smith Covariance is a statistical measure of how two assets move in relation to each other. It provides diversification and reduces the overall volatility for a portfolio.

Learn how to calculate the beta of an investment using Microsoft Excel. ... This measurement is called covariance. ... Definition, Formula, Calculation, and Example.