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Custom Beta Three Years Formula in Excel

Understanding Custom Beta Three Years

The Custom Beta Three Years formula in Excel (with MarketXLS) helps you measure a stock’s volatility compared to a benchmark index over a three-year period. By default, it compares against the SPY ETF on a daily basis, but you can also specify a different benchmark and change the frequency to weekly or monthly.

  • Purpose: Determine how much a stock moves relative to a benchmark over 3 years.
  • Key Benefits:
    • Provides insight into risk and volatility
    • Helps compare different stocks against a common benchmark
    • Useful for portfolio optimization and risk assessment
  • When to Use:
    • Evaluating long-term volatility trends
    • Comparing a stock’s risk with various benchmark indices
    • Making data-driven investment decisions

Syntax and Parameters

Use the CustomBetaThreeYears function to retrieve a three-year beta value. Below is the typical syntax used in Excel:

=CustomBetaThreeYears(Symbol, [symbol_Benchmark], [ReturnPeriod])
Parameter Description Required Example
Symbol The ticker symbol of the stock (e.g., "MSFT"). Yes =CustomBetaThreeYears("MSFT")
symbol_Benchmark The benchmark’s ticker symbol. Default is "SPY". No =CustomBetaThreeYears("MSFT","AAPL")
ReturnPeriod The frequency of returns. Accepts "daily", "weekly", or "monthly". Default is "daily". No =CustomBetaThreeYears("MSFT","SPY","monthly")

Return Value

  • Data Type: Numeric (double) representing the stock’s beta.
  • Possible Errors:
    • Returns NA if an invalid symbol is provided or if there is a connection/license issue.

?? Note: Beta calculations rely on historical data. If there is insufficient or no data available, the function may return NA.

Examples and Usage

Below are several ways to use the Custom Beta Three Years formula in Excel:

Basic Examples

  1. Daily beta against SPY (default benchmark and period):

    =CustomBetaThreeYears("MSFT")

    This calculates a 3-year daily beta for Microsoft stock against SPY.

  2. Daily beta against a different benchmark (e.g., AAPL):

    =CustomBetaThreeYears("MSFT", "AAPL")

Frequency Variations

  • Weekly Beta:
    =CustomBetaThreeYears("MSFT", "AAPL", "weekly")
  • Monthly Beta:
    =CustomBetaThreeYears("MSFT", "AAPL", "monthly")

Date Input Formats

Although this function automatically calculates data going back 3 years from today, you can provide alternate references or transformations if needed (though it’s not typical for this function):

  • Using a cell reference for date:
    =CustomBetaThreeYears(A1)
  • Using a direct date string:
    =CustomBetaThreeYears("2024-03-15")
  • Using an Excel date function:
    =CustomBetaThreeYears(TEXT(A1,"yyyy-mm-dd"))

Symbol Variations

  • Indices:
    =CustomBetaThreeYears("^SPX")
  • Options:
    =CustomBetaThreeYears("@MSFT 110122C00020000")
  • Crypto:
    =CustomBetaThreeYears("BTCUSD:DEFAULT")

? Pro Tip: For faster calculations on multiple symbols, use proper cell references and array formulas if supported by your version of Excel to batch-process beta calculations.

Common Questions

  1. Why am I getting NA?

    • An invalid or unsupported symbol could cause NA. Ensure the ticker is recognized by MarketXLS. Also verify your MarketXLS license and internet connection.
  2. Can I compare multiple stocks against multiple benchmarks at once?

    • Yes, but you need to enter separate formulas for each pair of stock and benchmark. Consider referencing cells for dynamic comparisons.
  3. Does the function automatically adjust for corporate actions (splits, dividends)?

    • MarketXLS updates data to reflect adjusted close prices, minimizing data errors.
  4. Is the calculation resource-intensive?

    • The function makes a web call. For large datasets, performance may be impacted, but typical usage should be seamless in Excel.
  5. Which frequency is best?

    • Daily data provides shorter-term volatility; weekly or monthly can smooth out noise. Choose based on your timeframe and risk appetite.

?? Note: Always ensure your MarketXLS add-in is up to date for accurate data retrieval.


By understanding and using the Custom Beta Three Years formula in Excel, you can gain valuable insights into a stock’s long-term volatility, enabling you to make more informed investment decisions.

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