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Custom Beta One Year Formula in Excel

Start measuring your stock’s volatility relative to the market over the past year with the Custom Beta One Year formula in Excel (powered by MarketXLS). This function calculates a stock’s one-year beta against a chosen benchmark, helping you analyze risk and performance with ease.

Understanding Custom Beta One Year

  • Purpose: The CustomBetaOneYear function computes a stock’s beta value over a one-year period, comparing returns against a specified benchmark.
  • Key Benefits:
    • Quickly evaluate how volatile a stock is relative to a market index or another stock.
    • Make data-driven decisions about portfolio risk.
    • Seamless integration with MarketXLS.
  • When to Use:
    • Assess risk before adjusting portfolio positions.
    • Compare multiple stocks or ETFs to identify potential under- or over-performers.

Syntax and Parameters

=CustomBetaOneYear(Symbol, [symbol_Benchmark], [ReturnPeriod])
Parameter Description Required Example
Symbol The ticker symbol for the security to calculate the beta for. Yes "MSFT", "^SPX", "BTCUSD:DEFAULT"
symbol_Benchmark The benchmark symbol. Defaults to "SPY" if left blank. No "AAPL", "^SPX"
ReturnPeriod The frequency of returns used for calculation: can be daily, weekly, or monthly. Defaults to daily. No "weekly"

Return Value:

  • Returns a numeric beta value. Higher than 1 indicates the security is more volatile than the benchmark; lower than 1 indicates it is less volatile.

?? Note: If the symbol is invalid, the function will return "NA". The function also checks for a valid MarketXLS license.

Examples and Usage

Below are practical ways to use CustomBetaOneYear in Excel:

  1. Basic Daily Beta Calculation

    =CustomBetaOneYear("MSFT")

    Calculates MSFT’s one-year beta relative to the default SPY benchmark on a daily basis.

  2. Comparing Against a Different Stock

    =CustomBetaOneYear("MSFT","AAPL")

    Compares MSFT’s volatility directly against AAPL.

  3. Monthly Return Frequency

    =CustomBetaOneYear("MSFT","AAPL","monthly")

    Uses monthly returns data for the past year to compute beta.

  4. Weekly Return Frequency

    =CustomBetaOneYear("MSFT","AAPL","weekly")

    Calculates beta using weekly returns to smooth out daily volatility.

? Pro Tip: Use different benchmarks (e.g., ^SPX for the S&P 500) to gauge how your chosen stock compares against various market indices.

Error Handling and Special Cases

  • Returns "NA" if an invalid ticker is provided or if there is a licensing issue.
  • If symbol_Benchmark is not specified, it defaults to "SPY".
  • If ReturnPeriod is not specified or invalid, it defaults to "daily".
  • Calculation is based on one year of historical data from today’s date, so custom date inputs are not applicable to this function.

Performance Considerations

  • The function queries MarketXLS data in real-time. When retrieving large data sets or during peak usage, performance may be slower.
  • Ensure a stable internet connection for seamless data retrieval.

Common Questions

  1. Can I specify a custom date range for the beta calculation?

    • Not with CustomBetaOneYear. It automatically calculates beta for the past year.
  2. Why am I getting “NA”?

    • Make sure the Symbol is valid and that your MarketXLS license is active. If you’re still seeing “NA,” confirm your internet connection.
  3. Which ReturnPeriod should I use?

    • daily for detailed short-term analysis, weekly or monthly to reduce noise and smooth out volatility fluctuations.
  4. Can I compare multiple stocks at once?

    • Yes. By changing the symbol_Benchmark parameter, you can quickly compare each security against different benchmarks in separate cells.

?? Note: Values are typically updated daily around market close and may not reflect real-time intraday changes.

Use the Custom Beta One Year formula to gain insights into your portfolio’s risk profile and make confidently informed investment decisions.