Beta Calculator
Beta measures how much a position tends to move when the market moves 1%. Above 1 it amplifies the market; below 1 it's calmer; below 0 it leans the other way. This computes it from its building blocks — the correlation to the market and the two volatilities.
- • Beta (β) = correlation × (asset volatility ÷ market volatility).
- • β ≈ 1 moves with the market · β > 1 amplifies it · 0 < β < 1 is calmer · β < 0 leans opposite.
Worked example: 0.6 correlation, 30% asset volatility, 18% market volatility → 0.6 × (30 ÷ 18) = 1.00 — it swings more per move, but only loosely tracks the market.
Beta is a backward-looking average of a linear relationship — it's unstable over time and says nothing about the days that matter most (in a crash, scattered betas tend to converge toward 1). A high beta isn't "better" or "worse", just more market-sensitive. Educational tool, not advice.
A free, interactive calculator for any blog, newsletter or forum — same numbers as here, and it links back.
<iframe src="https://stratsemble.com/embed/tools/beta-calculator" width="460" height="360" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="Beta calculator — Stratsemble"></iframe>A calculator shows what a rule should do on paper. A backtest is how you find the rare few that actually beat simply buying and holding — costs on, losses shown, no look-ahead — so when you build one that survives, you'll know it isn't a fake edge, and can prove it forward before you risk real money. It won't tell you you'll win — nothing honest can.