Alpha and Beta Calculator
Free alpha and beta calculator. Measure your portfolio's market sensitivity (beta) and excess risk-adjusted return (alpha) against a benchmark index.
Portfolio Beta Calculator
Calculate weighted portfolio beta from individual asset betas. See CAPM expected return, market scenario analysis, and beta contribution by asset.
Format: TICKER:weight:beta (weights auto-normalize to 100%)
Portfolio Beta⧉
0.858
Neutral
Expected Return (CAPM)⧉
9.22%
Rf 4.5% + β×(Rm − Rf)
Risk Level⧉
Neutral
Less volatile than market
Total Weight⧉
100.0%
✅ Fully allocated
If Market −20%⧉
-17.2%
Portfolio expected move
If Market +20%⧉
17.2%
Portfolio expected move
Beta Contribution by Asset
AAPL30%
β 1.25
GOOGL25%
β 1.10
MSFT20%
β 0.95
BND15%
β 0.05
GLD10%
β 0.10
Asset Detail
| Ticker | Weight | Beta | CAPM Return | Beta Contribution |
|---|---|---|---|---|
| AAPL | 30.0% | 1.25 | 11.38% | 0.3750 |
| GOOGL | 25.0% | 1.10 | 10.55% | 0.2750 |
| MSFT | 20.0% | 0.95 | 9.73% | 0.1900 |
| BND | 15.0% | 0.05 | 4.78% | 0.0075 |
| GLD | 10.0% | 0.10 | 5.05% | 0.0100 |
| Portfolio | 100% | 0.858 | 9.22% | 0.8575 |
Market Scenario Analysis
| Market Move | Portfolio Move |
|---|---|
| -30% | -25.7% |
| -20% | -17.2% |
| -10% | -8.6% |
| -5% | -4.3% |
| 0% | 0.0% |
| +5% | +4.3% |
| +10% | +8.6% |
| +20% | +17.2% |
| +30% | +25.7% |
Planning notes, formulas, and examples
About the Portfolio Beta Calculator
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.
When This Page Helps
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.
How to Use the Inputs
- Enter your holdings as Ticker:Weight:Beta, one per line.
- Weights are automatically normalized to 100% if they don't sum exactly.
- Set the expected market return and risk-free rate for CAPM calculations.
- Review portfolio beta and risk classification.
- Check the beta contribution chart to identify your biggest risk contributors.
- Use the scenario table to see portfolio impact across market conditions.
Formula used
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 BetaExample Calculation
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.
Tips & Best Practices
- A balanced 60/40 portfolio typically has a beta of 0.55-0.65.
- Adding even 10% in bonds or gold can significantly reduce portfolio beta.
- Beta doesn't capture sector concentration — you can have β = 1.0 with 100% tech stocks.
- In retirement, target portfolio beta 0.4-0.7 to reduce drawdown risk.
- Leveraged ETFs (2× or 3×) amplify beta proportionally — a 3× ETF on a β = 1.0 index has β = 3.0.
Portfolio Reading
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.
Practical Use
Review the largest beta contributors first, then decide whether to rebalance, hedge, or simply accept the risk because it fits your objective.
Sources & Methodology
Last updated:
Methodology
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.
Sources
- Beta (Investor.gov / U.S. Securities and Exchange Commission)
- Capital Asset Pricing Model (CAPM) (Investor.gov / U.S. Securities and Exchange Commission)
- Risk and Return (Investor.gov / U.S. Securities and Exchange Commission)
Frequently Asked Questions
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.
More in this topic
Annualized Return Calculator
Free annualized return calculator. Convert cumulative investment returns into annualized rates to compare performance across different holding periods.
Annuity Calculator
Calculate the future value, present value, and payment schedule for ordinary annuities and annuities due. Includes growing annuity analysis and year-by-year breakdown.