Updated 2026-04-20 · Investing · Educational use only ·

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Portfolio Beta Calculator

Portfolio market risk.

Calculate portfolio beta as the weighted average of individual stock betas — see how sensitive your overall portfolio is to market moves.

What this tool does

Portfolio beta is the weighted average of individual stock betas — a measure of sensitivity to market movements. This calculator takes the weight and beta of up to three holdings and returns your portfolio beta, along with a band interpretation showing whether it sits in defensive territory (below 1), market-like (around 1), above-market (between 1 and 1.5), or aggressive (1.5 and above). The result illustrates how your portfolio may move relative to the broader market. The inputs that drive the outcome most are the beta values of each holding and their allocation weights — a single large position with high beta will pull the overall figure upward. A typical use case: modelling how adding a volatile stock to a stable portfolio changes its overall market sensitivity. Note that this calculation assumes beta values remain constant and doesn't account for correlations between holdings or market regime changes. The output is for educational illustration only.

Quick answer: with the default values, the result is 1.30 (Portfolio Beta). Adjust the values below for your own figures.

Enter Values

Stock A Weight %

Stock A Beta

Stock B Weight %

Stock B Beta

Stock C Weight %

Stock C Beta

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Formula Used

β_{p} = \sum w_{i} β_{i}

β_{p}

Portfolio beta

w_{i}

Weight of holding i

β_{i}

Beta of holding i

Disclaimer

Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.

Portfolio beta measures systematic risk vs market: weighted average of individual stock betas. Beta of 1.0 matches market risk. 1.5 = 50% more volatile than market. 0.5 = 50% less volatile. Used to gauge portfolio risk exposure and required return via CAPM model.

Example (illustrative betas): 40% Tesla (beta 2.0) + 40% Microsoft (beta 1.0) + 20% Coca-Cola (beta 0.5). Portfolio beta = (0.4 × 2.0) + (0.4 × 1.0) + (0.2 × 0.5) = 0.8 + 0.4 + 0.1 = 1.3. Portfolio is 30% more volatile than market. 10% market drop = 13% portfolio drop expected.

Beta interpretation: 0 = uncorrelated with market (rare). 0-1 = defensive (utilities, consumer staples). 1.0 = market-like (S&P 500 ETF). 1.0-1.5 = above-market risk. 1.5+ = aggressive (tech, biotech, leveraged ETFs). Negative beta = inversely correlated (gold, some hedge strategies). Use beta for: sizing positions, calculating expected returns, hedging market exposure. Limitation: beta is historical and unstable - past beta may not predict future.

Quick example

With stock a weight of 40% and stock a beta of 2 (plus stock b weight of 40% and stock b beta of 1), the result is 1.30. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter a weight and a beta for up to three holdings — Stock A, B, and C. The beta values and the allocation weights are what move the result: a large weight on a high-beta holding pulls the portfolio beta up, while a high beta on a tiny position barely registers. Changing one weight or beta at a time shows which holding drives your overall market sensitivity.

What's happening under the hood

Portfolio beta = sum of (weight × individual beta) across all holdings. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Where this fits in planning

This is a "what-if" tool, not a forecast. It helps to test ideas: what happens to portfolio beta if you swap a defensive holding for a higher-beta one, or shift more weight into the most volatile position. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.

Example Scenario

40%×2 + 40%×1 + 20%×0.5 = 1.30.

Inputs

Stock A Weight %:40%

Stock A Beta:2

Stock B Weight %:40%

Stock B Beta:1

Stock C Weight %:20%

Stock C Beta:0.5

Expected Result1.30

Expected Result breakdown
Total Weights	100.00%
Risk Rating	Above market risk
1% Market Move = Portfolio Move	1.30%

This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.

Sources & Methodology

Methodology

This calculator computes portfolio beta by taking a weighted average of individual stock betas. For each holding, the calculator multiplies the stock's weight as a percentage of the total portfolio by its beta coefficient, then sums these products across all positions. The result represents the portfolio's systematic market risk relative to a broad market benchmark. The model assumes weights remain constant, individual betas are static, and that beta alone captures relevant risk dimensions. The calculation does not account for correlation between holdings, changes in weights over time, estimation error in individual betas, or how portfolio risk may shift with market conditions. Beta is a historical measure and may not reflect future market sensitivity.

References

Beta Calculation

Frequently Asked Questions

Where to find stock betas?

Yahoo Finance: 'Statistics' tab shows beta. Morningstar: includes beta on stock pages. Bloomberg terminal: most comprehensive. Most use 5-year monthly betas vs S&P 500. Different sources give slightly different values due to time period and benchmark choice. Using one consistent source keeps portfolio comparisons on a like-for-like basis.

Beta limitations?

(1) Historical - past beta doesn't predict future. (2) Unstable for small companies. (3) Captures only systematic risk, not company-specific risk. (4) Linear assumption breaks during crashes (correlations spike). Beta works as one input rather than a sole risk measure, and is often read alongside the Sharpe ratio, maximum drawdown, and scenario analysis.

How beta affects expected returns?

CAPM: Expected Return = risk-free rate + Beta × (Market Return - risk-free rate). High beta = higher expected return for higher risk. 5% risk-free rate + 1.5 beta × 5% market premium = 12.5% expected. Low beta utility: 5% + 0.5 × 5% = 7.5% expected. Beta determines required return for risk taken.

Hedging with negative beta?

Negative beta assets (gold, bear-market funds, certain hedges) reduce portfolio beta. 80% S&P + 20% gold (beta -0.2): portfolio beta = 0.76. Lowers volatility but typically reduces returns too. These hedges cushion crashes but typically reduce returns the rest of the time, so the protection carries an ongoing cost.

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