Tag: historical beta

Estimating and Forecasting Betas

Estimating and Forecasting Betas

Estimating and forecasting beta of each stock that is a potential candidate for inclusion in a portfolio is a prerequisite to apply the single-index model. Analysts could be asked to provide subjective estimates of beta for a security or a portfolio. Conversely, estimates of future beta could be arrived at by estimating beta from past data and using this historical beta as an estimate of the future beta.

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