BizTerm Definition Beta equation (stocks) Full Definition

The beta of a stock is determined as follows:
[(n) (sum of (xy)) ][(sum of x) (sum of y)]
[(n) (sum of (xx)) ][(sum of x) (sum of x)]
where: n = # of observations (2460 months)
x = rate of return for the S&P 500 Index
y = rate of return for the stock


