- 1). Look up the historical data for the stock. You can find this by looking up the information on your favorite investment research site such as Yahoo! Finance, Google Finance or MSN. You can also contact the Investor Relations department for the company to request historical pricing data. You will need at least one year (365 days) of data.
- 2). Find historical pricing data for the Dow Jones Industrial Average. This is one of the most popular average stock index in the world and can be found in most any newspaper or investment research site. Use this as a proxy for benchmark prices.
- 3). Open an instance of a spreadsheet. Enter historical stock data in column A and benchmark data in column B. Calculate the percent change for column A and column B in columns C and D, respectively. The calculation is cell two minus cell one divided by cell one. Then multiply the answer by 100 for the percentage. Do this for all 365 days for both columns.
- 4). Calculate beta. Due to the nature of the calculation you must use a formula within the spreadsheet to calculate it. The function is referred to as the slope function and is used to find the slope of the securities market line which is the line plotted by percent changes calculated from both column A and column B. Column A represents the first line and column B represents the second line. The formula looks like this: =SLOPE(ColumnA1:ColumnA365,ColumnB1:ColumnB365).
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