How do you estimate beta?

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How do you estimate beta?

2006-08-06 16:29:47 · 2 answers · asked by pookynoodle20 1 in Business & Finance ➔ Personal Finance

2 answers

Regress historical prices against the index. Beta is the coefficient. alpha is the constant.

2006-08-06 16:34:05 · answer #1 · answered by kheserthorpe 7 · 0⤊ 0⤋

first answer is right, but may not help you.
calculate the % change for each period (day, week) for the stock
calcuate the % change for each period for the index (NYSE, S&P)
subtract one from the other, and plot values, setting x to the index, y to the stock.
regress the slope of the plots; that's the beta.
see wikipedia for a fuller explanation

2006-08-10 17:37:32 · answer #2 · answered by Michael K 6 · 0⤊ 0⤋