- 1). Compare betas. Beta is a common measurement for risk. Mathematically, it is the relationship between stock market portfolio returns and general market rates of return. The higher the beta, the higher the risk on a stock market portfolio.
- 2). Look up a stock portfolio's beta. Go to Yahoo! Finance. Yahoo! Finance is the top-rated financial research site online, according to Alexa.com.
- 3). Input the ticker symbol or the name of the company in the box located in the top left corner of the site. Click "Get Quotes."
- 4). Go to Key Statistics in the left panel under Company.
- 5). Scroll to Stock Price Information to find the stock's beta. A beta of 1 is defined as "medium risk" compared to the rest of the market. A beta below 1 is defined as "low risk," or less volatile than the market. A beta of over 2 is viewed as "higher risk," or more volatile than the market.
- 6). Multiply the weighted average of these stocks by the beta to get the return for the portfolio. To get a weighted average, add the value of all your shares.
- 7). Divide the value of each company by the value of the total portfolio. This is the company's weight in the portfolio.
- 8). Multiply each weight by its corresponding beta.
- 9). Add all the weighted betas in the portfolio to get the total portfolio beta.
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