CAPM Beta Calculation in Excel
- Step 1 – Download the Stock Prices & Index Data for the past 3 years. ...
- Step 2 – Sort the Dates & Adjusted Closing Prices. ...
- Step 3 – Prepare a single sheet of Stock Prices Data & Index Data.
- Step 4 – Calculate the Fractional Daily Return.
- Step 5 – Calculate Beta – Three Methods.
Can you calculate CAPM in Excel?
CAPM calculations use a market's historical return and an individual stock's beta, or volatility, within that market. You can make a CAPM worksheet using Microsoft Excel and current market and stock information available online.
What is the formula for beta in Excel?
The first is to use the formula for beta, which is calculated as the covariance between the return (ra) of the stock and the return (rb) of the index divided by the variance of the index (over a period of three years).