How can I find a beta value for a company or sector?
Beta values (often described as 'Beta coefficients' or 'Beta relatives') are used by some investors to measure the movement of a share and to help assess the risk involved when putting together an investment portfolio.
What's on this page?
- Calculating and interpreting Beta values
- Publications with Beta values
- Databases with Beta values
- Further sources
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Calculating and interpreting Beta values
The value of beta is calculated using historical share price and market index data, which indicates the past sensitivity of a share to market falls and rises.
In one of his books, Jim Slater, the Chartered Accountant who founded Company REFS (Really Essential Financial Statistics), provided the following advice for interpreting a value: "The market's Beta coefficient is 1; shares with a Beta larger than 1 are more volatile than the market and shares with Beta of under one are less risky."
Our collection includes a number of articles and books on stock market investment which explain Beta values in greater depth. An introduction to stock exchange investment by Janette Rutterford includes a section explaining how the beta values from the Risk Measurement Service can be used to analyse portfolio performance.
What type of beta do you need?
The beta values provided through our most popular resource, the Risk Measurement Service, are equity betas (also known as levered or geared betas) which include the debt that a given company has taken on. An asset beta (also known as the unlevered beta) is the beta of a company without any debt included.
It is possible to use equations to calculate an unlevered beta from a levered beta or to adjust an existing beta to reflect the impact of taking on additional debt. The methods of calculation are discussed in a number of books in our collection, including An introduction to stock exchange investment by Janette Rutterford (p242-246).
Sources for Beta values
Beta values are published in a number of company directories using a variety of formulas, values and reference share indices. The time period covered can also vary, for example the Risk Measurement Service uses monthly returns for the past 60 months whilst other sources use between 24 and 36 months. It is inadvisable to make comparisons between sources without first establishing the degree of difference in the way these values have been compiled.
The Library enquiry service can provide Beta values to ICAEW members, ACA students and other entitled users. Non-members can consult our resources in person on payment of our daily access fee - see who can use the Library for further details.
Risk Measurement Service (LBS)
The London Business School publish the quarterly Risk Measurement Service which provides Beta values, various risk measures and other key data for 3,000 UK shares, including every UK stock with a full listing on the London Stock Exchange and all AIM listed stocks.
The company tables are arranged alphabetically and by sector, with separate tables for the FTSE 100, FT 30 and sector leaders. An additional table highlights the companies with the highest and lowest beta.
The industry tables feature beta values for industry groupings (using FTSE-ICB sectors) and the market as a whole.
The Library holds the print edition of the Risk Measurement Service from 2008 onwards.
Financial Analysis Made Easy (FAME)
The FAME database from Bureau van Dijk (BVD) includes Beta values for most, but not all, publicly listed companies. The database provides the option to view Beta values for an individual company or for a range of companies.
The formula used by BVD to calculate the the Beta value is explained in the FAME user guide Security and price information: Beta.
ICAEW Members and ACA students can access FAME within the Library.
To view the data on Beta values for an individual company using FAME
1. Select the company using the Search options in FAME.
2. Use the Company report option to load the standard report.
3. Use the Stock data: security and price information and Weekly pricing series options to view the data available.
To view the data on Beta values for a range of companies using FAME
1. Select a range of companies using the Search options in FAME.
2. Use the List option to view the list of companies.
3. Use the format options for beta values (listed under Stock data) to display the Beta values, correlation coefficients and reference index that you require.
The FT website includes Beta values for equities listed on its Markets data: Equities page. The Global equity screener allows users to identify companies based on a range of criteria, including Beta values. An explanation of the Beta figure used could be found in the lexicon.
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