From the statistical definition above, an alternative definition of beta is that it equals the correlation between the stock's returns and the market's returns multiplied by the standard deviation ...

Following up on that, of course, calculating statistical measures such as standard deviation and correlation manually can be cumbersome.

The coefficient of determination is used in statistical analysis to assess how well a model explains and predicts future outcomes. It's more commonly known as r-squared.

How to Calculate the Correlation Coefficient A simple calculation method is to use what's known as the Pearson correlation coefficient calculator, named after the English mathematician Karl Pearson.

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Calculating the correlation coefficient is time-consuming, so data is often plugged into a calculator, computer, or statistics program to find the coefficient.