Custom Beta Three Months Formula in Excel

Leverage the Custom Beta Three Months formula in Excel (with MarketXLS) to measure a stock’s volatility (beta) relative to a benchmark index over a rolling three-month period. This powerful function helps you make more informed trading and investment decisions by revealing how sensitive a stock is to market swings.

Understanding Custom Beta Three Months

• Purpose: Calculates the beta factor of a specified stock compared to a benchmark index (default is “SPY”) over the last three months.
• Key Benefits:
  • Helps assess the risk profile of a stock.
  • Aids in comparing relative performance vs. market movements.
  • Supports better decision-making in portfolio construction.
• When to Use:
  • Evaluating the short-term volatility of new or existing positions.
  • Assessing how quickly a stock responds to market direction over a 3-month window.

Syntax and Parameters

=CustomBetaThreeMonths(Symbol, [symbol_Benchmark], [period])

Return Value:
A numeric value representing the three-month beta. A result of “1” implies the stock moves in tandem with the benchmark. Values above 1 indicate increased volatility, while values below 1 suggest lower volatility.

?? Note: Returns "NA" if the symbol is invalid, your MarketXLS license is not valid, or if an unexpected error occurs.

Examples and Usage

Below are practical ways to use CustomBetaThreeMonths in Excel. Each example assumes MarketXLS is installed and properly configured.

1. Basic calculation:

   =CustomBetaThreeMonths("MSFT")

   Calculates the three-month beta for Microsoft against the default benchmark “SPY” on a daily return basis.

2. Using a different benchmark:

   =CustomBetaThreeMonths("MSFT", "AAPL")

   Measures how MSFT moves in relation to AAPL as the benchmark for the last three months.

3. Changing the calculation period to monthly:

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

   Uses monthly returns to calculate the three-month beta.

4. Setting the period to weekly:

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

   Uses weekly returns for the three-month beta calculation.

? Pro Tip: You can experiment with different benchmarks (like indices or other stocks) to see which comparisons yield the most actionable insights. For example, comparing two stocks in the same sector helps understand relative risk levels within that sector.

Common Questions

1. What if I input an invalid symbol?
   The function returns "NA". Double-check ticker symbols or try including the exchange suffix.

2. Do I need to provide dates?
   No. The function automatically looks back from today’s date to 91 days (approximately 3 months). No manual date inputs are required.

3. Why is my result “NA”?

   • Invalid ticker symbol.
   • You might have an expired or invalid MarketXLS license.
   • There could be no sufficient data for that timeframe.

4. Can I use it for crypto or options?
   Yes, as long as MarketXLS supports data for the symbol. For example, "BTCUSD:DEFAULT" or "@MSFT 110122C00020000".

5. Any performance considerations?
   Under normal conditions, CustomBetaThreeMonths executes quickly. However, retrieval from MarketXLS servers might take slightly longer if you’re on a slower internet connection or using a large number of concurrent data calls.

?? Note: For large-scale portfolio analysis, consider structuring your spreadsheet to minimize repeated calls, or use caching features within MarketXLS for efficiency.