Calculate weighted portfolio beta from individual asset betas. See CAPM expected return, market scenario analysis, and beta contribution by asset.
Portfolio beta measures how sensitive your entire portfolio is to market movements. A portfolio beta of 1.2 means when the market drops 10%, your portfolio is expected to drop 12%. Understanding this number is essential for risk management and return expectations.
The calculation is straightforward: multiply each asset's weight by its beta, then sum. But the insights go much deeper. This calculator shows each asset's contribution to total portfolio risk, estimates CAPM expected returns, and runs market scenario analysis from −30% to +30% moves so you can visualize your portfolio's behavior in different market environments.
By examining the beta contribution bars, you can immediately see which holdings drive the most portfolio risk. A 5% allocation to a β = 2.5 stock contributes more systematic risk than a 30% allocation to bonds at β = 0.05. This visibility helps you make targeted rebalancing decisions to hit your desired portfolio risk profile.
Knowing your portfolio beta tells you exactly how much market risk you carry. This calculator breaks down beta contribution by asset so you can adjust allocations to reach your target risk level instead of guessing. Keep these notes focused on your operational context. Tie the context to the calculator’s intended domain. Use this clarification to avoid ambiguous interpretation.
Portfolio Beta = Σ(w_i × β_i) Expected Return = Rf + β_portfolio × (Rm − Rf) Beta Contribution = w_i × β_i Portfolio Move ≈ Market Move × Portfolio Beta
Result: Portfolio Beta: 0.78, CAPM Return: 8.8%
The 25% in bonds and gold brings the weighted beta down to 0.78 — a moderately defensive portfolio. With a 10% market return and 4.5% risk-free rate, CAPM predicts 8.8% expected return.
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Your portfolio has the same systematic risk as the market. It should move roughly in line with major indexes like the S&P 500.
Yes, if you hold enough inverse ETFs or assets with negative beta (like put options). A negative beta portfolio profits when the market falls.
No — lower beta means lower expected return. The goal is the RIGHT beta for your risk tolerance and time horizon, not the lowest possible.
Beta captures systematic (market) risk only. Unsystematic risk from individual stocks can cause your actual moves to differ significantly from beta predictions.
Yahoo Finance, Google Finance, Bloomberg, or your broker's research tools. Betas are typically calculated from 2-5 years of monthly returns vs. a benchmark.
Yes — as stock prices change, weights drift and portfolio beta changes. Rebalance quarterly or when beta deviates 0.1+ from your target.