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Custom Beta Two Years Formula in Excel

The Custom Beta Two Years formula in Excel with MarketXLS helps you measure a stock’s volatility relative to a benchmark (by default, SPY) over a two-year period. This function is ideal for investors looking to understand how a security’s returns move in comparison to the broader market or another ticker.

Understanding Custom Beta Two Years

  • Purpose: Calculates the two-year beta value to indicate how a given stock’s returns fluctuate compared to a benchmark.
  • Key Benefits:
    • Provides insights into the stock’s relative risk.
    • Helps in portfolio risk assessment and asset allocation.
    • Useful for quickly comparing volatility across different securities.
  • When to Use:
    • Evaluating long-term volatility of a stock (over two years).
    • Comparing multiple symbols using a custom benchmark.
    • Deciding if a stock has higher or lower market risk.

Syntax and Parameters

Syntax

=CustomBetaTwoYears(Symbol, [Symbol_Benchmark], [ReturnPeriod])

Parameter Table

Parameter Description Required Example
Symbol The ticker symbol for which you want to calculate beta. Yes "MSFT"
Symbol_Benchmark The ticker symbol to use as the benchmark (default is SPY). No "AAPL"
ReturnPeriod Frequency of returns: "daily", "weekly", or "monthly" (default: "daily"). No "monthly"

Return Value

Returns a numeric value representing the two-year beta. If the Symbol is invalid or the license is not active, the function returns "NA".

?? Note: Beta values above 1.0 often indicate higher volatility than the market, while values below 1.0 suggest lower volatility.

Examples and Usage

Below are practical examples demonstrating how to use the Custom Beta Two Years formula in Excel:

  1. Basic Beta Calculation (default benchmark = SPY, daily returns):

    =CustomBetaTwoYears("MSFT")

    This calculates the daily beta of MSFT against SPY for the past two years.

  2. Beta Calculation with Custom Benchmark (daily returns):

    =CustomBetaTwoYears("MSFT","AAPL")

    Measures MSFT’s daily volatility relative to AAPL over the past two years.

  3. Monthly Beta Calculation:

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

    Determines MSFT’s beta relative to AAPL based on monthly returns over two years.

  4. Weekly Beta Calculation:

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

    Computes weekly beta for MSFT compared to AAPL over two years.

? Pro Tip: Use this function alongside other MarketXLS analytics to get a comprehensive risk profile of your portfolio.

Common Questions

  1. What happens if I leave Symbol_Benchmark blank?
    By default, the benchmark is set to SPY.

  2. Which return periods are supported?
    The allowed return periods are daily, weekly, or monthly. Using other inputs will return an error message.

  3. Why am I getting "NA"?

    • You may be missing a valid MarketXLS license.
    • The symbol could be invalid or unavailable in the database.
  4. Are there any performance considerations?
    For most use cases, the function runs quickly. If you have a large number of calls in a single sheet, consider using caching or optimizing how frequently the data is refreshed.


Looking to broaden your analysis further? Check out related MarketXLS functions, such as total dividends paid calculations or return percentage over specific periods, to gain deeper insights into your investments.

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