i What this calculator does
Quick answer: Work out a share's beta from its correlation and volatility against the index, plus the expected return CAPM implies. With the default inputs (share volatility 28, index volatility 18), it returns beta of 1.151.
Beta measures how much a share moves relative to the market. A beta of 1.3 means that when the index rises 10%, the share has historically risen about 13%, and fallen further when the index fell.
It captures systematic risk, the part of volatility that diversification cannot remove, which is why the capital asset pricing model uses it to set an expected return. It is backward looking and unstable, so treat it as a description rather than a forecast.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the Beta Calculator
The form arrives filled in. Replacing one value at a time is the clearest way to see what the output depends on.
- 1. Share Volatility (% a year)
- 2. Index Volatility (% a year) JSE All Share or your benchmark
- 3. Correlation with the Index Between -1 and 1
- 4. Risk-Free Rate (%)
- 5. Expected Market Return (%)
- 6. Debt to Equity Ratio For the unlevered beta
The result panel reports:
- Beta Move per 1% index move
- Expected Return (CAPM) Risk-free plus beta times premium
- Unlevered Beta Stripping out the debt effect
Alongside the headline figures, the calculator reports share volatility, index volatility, correlation, equity risk premium. Those are the numbers that usually explain why the headline result came out where it did.
The method is visible: the steps sit directly below the result.
Common results
What the calculator returns as the share volatility changes, with every other input at its default (index volatility 18, correlation with the index 0.74, risk-free rate 9.8, expected market return 15.8, debt to equity ratio 0.37).
| Share Volatility | Beta | Expected Return (Capm) | Unlevered Beta |
|---|---|---|---|
| 7.5 % a year | 0.308 | 11.65% | 0.243 |
| 15 % a year | 0.617 | 13.50% | 0.486 |
| 30 % a year | 1.233 | 17.20% | 0.971 |
| 75 % a year | 3.083 | 28.30% | 2.428 |
| 150 % a year | 6.167 | 46.80% | 4.855 |
| 250 % a year | 10.278 | 71.47% | 8.092 |
Figures used in this calculator
The South African constants this calculator relies on, with the page that holds the current value and the date it was last verified.
- Regulation 28 limits: 75% equities, 45% offshore for retirement funds. Source: Retirement Fund Contribution Limits (verified 27 September 2026).
- Offshore allowances: R2 million SDA, R10 million FIA a calendar year. Source: Exchange Control Allowances (verified 27 September 2026).
How the calculation works
The calculator takes six inputs: Share Volatility, Index Volatility, Correlation with the Index, Risk-Free Rate, Expected Market Return and Debt to Equity Ratio. Index Volatility: JSE All Share or your benchmark. Correlation with the Index: Between -1 and 1. Debt to Equity Ratio: For the unlevered beta. The beta is 0.74 x (28.0% / 18.0%) = 1.151. The capm is 9.80% + 1.151 x 6.00% = 16.71%. The r-squared is 0.74^2 = 54.8% of variance explained by the market. The unlevered is 1.151 / (1 + 0.73 x 0.37) = 0.906. The breakdown also lists share volatility, index volatility, correlation and beta.
A worked example in rand
With the default inputs (share volatility 28 % a year, index volatility 18 % a year, correlation with the index 0.74, risk-free rate 9.8%, expected market return 15.8% and debt to equity ratio 0.37), the calculator returns a beta of 1.151, move per 1% index move. It also reports expected return (capm) 16.71% and unlevered beta 0.906. Double the share volatility to 56 and the beta moves from 1.151 to 2.302, the expected return (capm) moves from 16.71% to 23.61% and the unlevered beta moves from 0.906 to 1.813.
How to read the result
With these inputs the calculator's own verdict reads: "A beta of 1.15 is close to the market." The verdict changes as the inputs cross the thresholds the calculator uses, and it is the fastest way to see which side of them you are on. Diversification is measured by how holdings move together in a crisis, not by how many there are; five JSE shares in the same sector are one position.
The South African angle
Three things change the picture for a South African trader using the beta calculator. A South African portfolio carries a large single-currency risk by default, because salary, home and pension are all in rand, which is the argument for an offshore allocation above what the age-based rules suggest. JSE ETFs tracking global indices give offshore exposure without using the exchange control allowance, because the fund, not the investor, holds the foreign assets. Correlations that look low in calm years converged towards one in March 2020 for almost every asset class except government bonds and gold, which is the stress case a portfolio should be built for. The figures behind these points, and the ones the beta calculator itself uses, are on the exchange control allowances reference.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
Frequently asked questions
What does a beta above 1 mean?
That the share has historically moved more than the market, in both directions. JSE resource shares often carry betas well above 1 because commodity prices amplify the cycle. Defensive sectors such as food retail typically sit below it.
Can beta be negative?
Yes, if the correlation with the index is negative, which means the share has tended to move against the market. Gold miners sometimes show this during risk-off periods, though the relationship is unstable and rarely persists.
What is the difference between levered and unlevered beta?
Levered beta, the one you observe, includes the effect of the company's debt, which amplifies equity volatility. Unlevered beta strips that out to isolate the business risk, which is what you need when comparing companies with different capital structures.
Which index should I use?
The one that represents the opportunity set you are choosing from. For a South African portfolio that is usually the JSE All Share or the Top 40. Measuring a JSE share against the S&P 500 produces a number that is technically correct and practically meaningless.
How reliable is beta?
Moderately, and less so over short periods. It is estimated from past data and shifts as a business changes. The R-squared figure here tells you how much of the share's movement the market actually explains, and when that is low the beta is not saying much.
Does high beta mean high return?
CAPM says it should, in theory, because investors demand compensation for systematic risk. The empirical record is mixed, and low-volatility shares have historically done better than the model predicts. Treat the expected return as a benchmark rather than a forecast.
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