Calculate weighted portfolio beta from individual asset betas. See CAPM expected return, market scenario analysis, and beta contribution by asset.
Portfolio beta measures how sensitive your entire portfolio is to market movements. A portfolio beta of 1.2 means when the market drops 10%, your portfolio is expected to drop 12%. Understanding this number is essential for risk management and return expectations.
The calculation is straightforward: multiply each asset's weight by its beta, then sum. But the insights go much deeper. This calculator shows each asset's contribution to total portfolio risk, estimates CAPM expected returns, and runs market scenario analysis from −30% to +30% moves so you can visualize your portfolio's behavior in different market environments.
By examining the beta contribution bars, you can immediately see which holdings drive the most portfolio risk. A 5% allocation to a β = 2.5 stock contributes more systematic risk than a 30% allocation to bonds at β = 0.05. This visibility helps you make targeted rebalancing decisions to hit your desired portfolio risk profile.
Use this when you want to see how much of your portfolio moves with the market. It helps you spot the holdings that dominate systematic risk and tune allocations toward a beta that matches your risk target.
Portfolio Beta = Σ(w_i × β_i) Expected Return = Rf + β_portfolio × (Rm − Rf) Beta Contribution = w_i × β_i Portfolio Move ≈ Market Move × Portfolio Beta
Result: Portfolio Beta: 0.78, CAPM Return: 8.8%
The 25% in bonds and gold brings the weighted beta down to 0.78 — a moderately defensive portfolio. With a 10% market return and 4.5% risk-free rate, CAPM predicts 8.8% expected return.
Beta is a market-sensitivity measure, not a full risk score. A low-beta portfolio can still be concentrated in one sector, and a high-beta portfolio can be diversified across many names.
Review the largest beta contributors first, then decide whether to rebalance, hedge, or simply accept the risk because it fits your objective.
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This calculator computes weighted portfolio beta by multiplying each holding's weight by its beta and summing the results. It can also estimate a CAPM-style expected return from the portfolio beta and the user-entered market assumptions.
The scenario view is a sensitivity worksheet, not a prediction engine. It shows how the portfolio would behave if the chosen market input moved by a given amount.
Your portfolio has the same systematic risk as the market. It should move roughly in line with major indexes like the S&P 500.
Yes, if you hold enough inverse ETFs or assets with negative beta (like put options). A negative beta portfolio profits when the market falls.
No — lower beta means lower expected return. The goal is the RIGHT beta for your risk tolerance and time horizon, not the lowest possible.
Beta captures systematic (market) risk only. Unsystematic risk from individual stocks can cause your actual moves to differ significantly from beta predictions.
Yahoo Finance, Google Finance, Bloomberg, or your broker's research tools. Betas are typically calculated from 2-5 years of monthly returns vs. a benchmark.
Yes — as stock prices change, weights drift and portfolio beta changes. Rebalance quarterly or when beta deviates 0.1+ from your target.