Beta = Covariance of Asset's return with market return / Variance of market returns
Beta = $0.163 / 0.19^2 = 4.51$

Things to Remember

• Beta measures the sensitivity of a stock's returns to the market returns.
• A beta of 1 indicates that the stock's price will move with the market.
• A beta greater than 1 indicates the stock is more volatile than the market.
• A beta less than 1 indicates the stock is less volatile than the market.
• Covariance measures how two variables move together, while variance measures how a single variable deviates from its mean.
• Calculating beta involves dividing the covariance of the asset's returns with market returns by the variance of market returns.