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Contour plot of the beta function. In mathematics, the beta function, also called the Euler integral of the first kind, is a special function that is closely related to the gamma function and to binomial coefficients.
In probability theory and statistics, the beta distribution is a family of continuous probability distributions defined on the interval [0, 1] or (0, 1) in terms of two positive parameters, denoted by alpha (α) and beta (β), that appear as exponents of the variable and its complement to 1, respectively, and control the shape of the distribution.
To calculate beta, investors divide the covariance of an individual stock (say, Apple) with the overall market, often represented by the Standard & Poor’s 500 Index, by the variance of the ...
How to calculate beta. Beta is calculated by taking the covariance between the return of an asset and the return of the market and dividing it by the variance of the market. The measure is ...
The Blume beta shrinks the estimated OLS beta towards a mean of 1, calculating the weighted average of 2/3 times the historical OLS beta plus 1/3. A version based on monthly rates of return is widely distributed by Capital IQ and quoted on all financial websites.
Beta measures how volatile a stock is in relation to the broader stock market over time. A stock with a high beta indicates it's more volatile than the overall market and can react with dramatic ...
In statistics, standardized (regression) coefficients, also called beta coefficients or beta weights, are the estimates resulting from a regression analysis where the underlying data have been standardized so that the variances of dependent and independent variables are equal to 1. [1]
Continue reading → The post How to Calculate the Beta of a Portfolio appeared first on SmartAsset Blog. Investors, whether beginner or seasoned professionals, all have a threshold for risk. Some ...