Portfolio Beta Calculator
Beta is the primary measure of a portfolio's sensitivity to market movements. A portfolio beta above 1.0 amplifies market gains and losses; a beta below 1.0 cushions them. Knowing your portfolio's weighted average beta helps you understand how your overall holdings will respond to broad market swings and allows you to make informed decisions about whether to increase or decrease market exposure. This calculator lets you enter up to six holdings with their individual betas and portfolio weights (as percentages). The weights must sum to 100%. The calculator computes the weighted average beta and shows the implied portfolio return for a given market move, helping you visualise the practical impact.
Portfolio beta formula
Portfolio Beta = sum(Weight_i x Beta_i) for i = 1 to n
where Weight_i = Value of holding i / Total Portfolio Value
Expected Portfolio Return = Portfolio Beta x Market Return
Beta interpretation guide
- Beta = 1.0: portfolio moves exactly with the market.
- Beta > 1.0: portfolio is more volatile than the market (aggressive).
- Beta between 0 and 1.0: portfolio is less volatile than the market (defensive).
- Beta = 0: no correlation to market (e.g., cash).
- Beta < 0: negative correlation; portfolio tends to rise when market falls.
Portfolio beta: frequently asked questions
What is portfolio beta?
Portfolio beta measures the systematic (market) risk of your entire portfolio relative to a benchmark such as the S&P 500. A beta of 1.0 means the portfolio moves in line with the market. A beta of 1.5 means it tends to rise or fall 50% more than the market. A beta of 0.5 means it moves half as much.
How is portfolio beta calculated?
Portfolio beta is the weighted average of the individual betas of each holding, where the weight is the proportion of the portfolio's total value invested in each asset. Beta(portfolio) = sum(weight_i x beta_i) for all holdings i.
What beta is considered high vs. low?
Beta above 1.0 is considered high market sensitivity (more volatile than the market). Beta below 1.0 but positive is lower sensitivity. Beta near 0 suggests little correlation to the market (e.g., cash, some commodities). Negative beta means the asset tends to move opposite to the market (e.g., some inverse ETFs or gold during crises).
What is the difference between beta and standard deviation?
Standard deviation measures total volatility (both market-related and company-specific). Beta measures only the portion of volatility correlated with the overall market (systematic risk). Diversification can eliminate company-specific risk but not systematic risk measured by beta.
How can I reduce my portfolio beta?
To lower portfolio beta, increase allocations to low-beta assets such as bonds, consumer staples, utilities, or cash equivalents. Adding negatively correlated assets (inverse ETFs, gold) can also reduce beta but introduces other risks. Selling high-beta growth stocks and rotating to value or defensive sectors is another approach.
Official sources
- SEC Office of Investor Education: Beta - Investor.gov Glossary.
- Federal Reserve Bank of San Francisco: Stock Market Beta.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.