Portfolio Beta Calculator
Calculate value-weighted or percentage-weighted portfolio beta, review each holding’s contribution and estimate sensitivity to a hypothetical market move.
Portfolio beta results
| Holding | Allocation | Beta | Contribution |
|---|
Portfolio beta formula
Portfolio beta is the weighted average of the individual betas. For holding i:
Portfolio beta = Σ(weighti × betai)
When position values are entered, each weight equals the holding value divided by total portfolio value. When percentages are entered, the weights must add to 100%.
What portfolio beta measures
Beta estimates sensitivity to movements in the selected market benchmark. A beta of 1.00 indicates the same modeled sensitivity as the benchmark; 0.70 indicates lower sensitivity; 1.30 indicates higher sensitivity. A negative beta indicates an inverse modeled relationship. Beta measures systematic market exposure, not total volatility, loss probability or expected return.
Verified examples
| Holdings | Calculation | Result |
|---|---|---|
| US$60,000 at beta 1.20; US$30,000 at 0.80; US$10,000 at 0.00 | 60%×1.20 + 30%×0.80 + 10%×0.00 | Portfolio beta 0.9600; a +5% market move models +4.80% |
| 50% at beta 1.40; 30% at 0.70; 20% at −0.20 | 50%×1.40 + 30%×0.70 + 20%×−0.20 | Portfolio beta 0.8700; a −3% market move models −2.61% |
| 25% at beta −0.50; 75% at 1.50 | 25%×−0.50 + 75%×1.50 | Portfolio beta 1.0000 |
How to use the calculator
- Choose position values or portfolio weights.
- Enter each holding’s value or weight and a beta measured against the same benchmark and time convention.
- Optionally change the hypothetical market move, then calculate.
- Review total beta and each holding’s contribution. Contributions add to the portfolio beta.
Limits and assumptions
- Use 1 to 20 holdings. Every position value or weight must be greater than zero.
- Values may be no more than 1,000,000,000,000,000 with up to two decimal places. Weights may be no more than 100% with up to six decimals and must total 100% within 0.01 percentage point.
- Each beta may range from −10 through 10 and the hypothetical market move from −100% through 100%, with up to six decimal places.
- All individual betas must use the same benchmark, return interval, observation window and estimation method. Mixing definitions makes the weighted result misleading.
- The market-move result is a linear sensitivity estimate, not a forecast. Actual returns include asset-specific movements, changing correlations, nonlinear exposures, leverage, fees and taxes.
- The tool does not estimate individual beta from price history, covariance or regression. Enter betas from a consistent source.
- Results are educational estimates, not investment advice.
Cash is commonly modeled with beta near zero. If cash belongs in the allocation, add it as a holding and enter the beta assumption you intend to use.
Frequently asked questions
Can I use different market indexes for different holdings?
No. Portfolio beta is meaningful only when every holding’s beta is measured against the same benchmark and convention.
Does a beta below 1 mean the portfolio cannot lose money?
No. It indicates lower modeled market sensitivity, not safety. The portfolio can still lose money because of market and holding-specific factors.
Why can a holding have a negative beta contribution?
A positive allocation multiplied by a negative beta produces a negative contribution, which reduces the weighted portfolio beta.
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