Power of Beta: Moving Beyond Its Limitations

By Azhar ul Haque Sario

The book "Power of Beta: Moving Beyond Its Limitations" by Azhar ul Haque Sario explores the significance of beta analysis in various fields including real estate, precious metals, cryptocurrency, sports betting, and human resource planning. The book offers practical insights, case studies, and step-by-step guides to understand the calculation and interpretation of beta values. It is a valuable resource for investors, analysts, and professionals seeking to improve their decision-making skills.

• Language: English
• Publisher: Azhar ul Haque Sario
• Release date: May 5, 2023
• ISBN: 9798223924098

Azhar ul Haque Sario

Hello, my name is Azhar ul Haque Sario, and I am excited to introduce myself to you. I have a strong educational background, having studied O and A levels before pursuing an MBA. I am also a certified project manager and hold Google certifications in digital marketing and e-commerce. Aside from my professional experience, I am also passionate about investing. As an investor, I have developed a keen eye for spotting profitable opportunities and have a track record of making sound investment decisions. I believe that investing is an essential component of building long-term wealth and financial security, and I am committed to helping others achieve their investment goals as well. In my free time, I love sharing my insights and knowledge with others. You can find me posting daily articles on my LinkedIn profile, where I share tips and advice on everything from investing to marketing and beyond. I am always looking for ways to learn, grow, and make a positive impact, and I look forward to connecting with you soon.

Book preview

Power of Beta: Moving Beyond Its Limitations

Azhar ul Haque Sario

Azhar ul Haque Sario

Copyright © 2023 Azhar ul Haque Sario

Copyright © 2023 by Azhar ul Haque Sario

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law.

Publisher's Name: Azhar ul Haque Sario

Cover design by Azhar ul Haque Sario

Interior design by Azhar ul Haque Sario

This book was created using Microsoft Word and Microsoft Excel

Dear Future Me,

As I write this, I don't know where life will take me or what challenges and triumphs lie ahead. But one thing I know for sure is that I believe in you. I dedicate this message to the person you have become, the goals you have achieved, and the dreams you continue to pursue.

May this message serve as a reminder of the person you once were, and the core values that have guided you this far. Always remember to stay true to yourself, be resilient in the face of adversity, and never stop learning. You are capable of amazing things, and I can't wait to see all the incredible accomplishments and moments of joy that the future brings.

With love and admiration,

Azhar ul Haque Sario

Contents

Title Page

Copyright

Dedication

Beta for Commoners

Explanation of Beta

1. Beta Analysis and Real Estate Investment

15 Real Estate Case Studies (Beta Version)

Real Estate Portfolio Management

Calculations

Case Study 1: Diversification Strategy

Case Study 2: Target Markets

Step 2: Calculate the returns of each market over a given period

Step 3: Calculate the beta of each market

Step 4: Calculate the expected returns and risk premiums of each market

Step 5: Identify target markets with the best risk-adjusted returns

Case Study 3: Case Study Investment Performance

Step 1: Collect historical pricing data for each investment in the portfolio

Step 2: Calculate the returns of each investment over a given period

Step 3: Calculate the beta of the portfolio

Step 4: Compare the portfolio beta to the benchmark

Step 5: Interpret the results and adjust portfolio allocation if necessary

Call to Action for Investors

2. Beta and Its Application for Precious Metals

Steps to Calculate Beta for Precious Metals like Gold

Assessing Risk and Returns of Precious Metal Investments Using Beta Analysis

Applications of Beta Analysis in Evaluating Risk and Returns for Precious Metal Investments

The Advantages and Benefits of Using Beta in Investment Analysis

Types of Commodities Markets and Stock Markets

Pearson's Correlation Coefficient Formula

High and Low Correlation

Benefits of Beta

Beta Analysis in Metals

Real-Time Application of Beta Analysis in Precious Metal Investments

Introduction

Using Beta for Volatility

Interpreting Beta Values

Cryptocurrencies and Beta Analysis Examples

5 Sample cryptocurrency examples

10 Case Study: Beta in Cryptocurrency

Case Study 7: Ripple (XRP)

Case Study 8: Binance Coin (BNB)

Case Study 9: Dogecoin (DOGE)

Case Study 10: Cardano (ADA)

Sample Calculation 1

Sample Calculation 2

Here's a sample calculation

Calculate the daily percentage changes in the prices of BCH and BTC

Calculate the variance of the daily returns of BTC

Case Study 3: Cardano (ADA)

Case Study 5: Chainlink (LINK)

An example Excel calculation to illustrate the beta values for BTC and ETH

Case Study 7: Ripple (XRP)

Case Study 8: Binance Coin (BNB)

Case Study 9: Dogecoin (DOGE)

Case Study 10: Cardano (ADA)

5. Exploring the Significance of Beta in Sports Betting

Applying Beta Analysis in Sports Betting Strategies

Step-by-Step Guide for Calculating the Beta Value in Financial Analysis

Examples of Beta Calculations

Example 1: Simple Beta Calculation

Example 2: Beta Calculation Using Excel

Example 3: Beta Calculation Using Regression Analysis

Example 4: Beta Calculation Using Monte Carlo Simulation

Example 5: Beta Calculation Using CAPM

Example 6: Beta Calculation Using APT

Example 7: Beta Calculation for Football Betting Strategy

Example 8: Beta Calculation for Basketball Betting Strategy

Example 9

Example 10

Example 11

Example 12

Example 13

Example 14

Example 15

Example 1: Simple Beta Calculation

Case Study of Examples

Example 3: Beta Calculation Using Regression Analysis

Real-Life Application of Example 3

Example 4: Beta Calculation Using Monte Carlo Simulation

Step-by-Step Guide for Calculating Beta with Monte Carlo Simulation

Example 5: Beta Calculation Using CAPM

Example 6: Beta Calculation Using APT

Example 7: Beta Calculation for Football Betting Strategy

Example 8: Beta Calculation for Basketball Betting Strategy

Real-Life Applications of Beta Example 9

Real-Life Applications of Beta Example 10

Real-Life Applications of Beta Example 11

Beta in Betting

Method 1:

Method 2:

High Beta Betting Opportunities

Low Beta Stable Odds

Examples of low Beta teams

Characteristics of Low Beta Teams: Stable Odds and Lower Potential Returns

Understanding Sports Betting Beta

Recommendations for sports bettors

Method 2

Conclude

6. Understanding the Significance of Beta in Human Resource (HR) Planning

Beta in Performance

High Beta Employees Implications

Low Beta Employees Management

Employee Engagement's Role

Predicting Employee Engagement

Beta in Recruitment

Beta Recruitment Pros/Cons

Integration of Beta in Employee Training

Practical Beta Examples

Benefits of Beta Training

Retention using Beta

The Beta Retention Importance

Importance of Beta Analysis in Employee Retention: Specific Reasons

Significance of Beta Analysis

Significance of Beta in Human Resource Planning: Specific Reasons

Beta for Commoners

Utilizing Beta in Exam Result Analysis for Students

Utilizing Beta in business operation for businessman

The Versatility of Beta Analysis

About the Author

About the Publisher

Beta for Commoners

Formula

β = Covariance (r, rm) / Variance (rm)

Where:

- β is the beta coefficient

- Covariance (r, rm) is the covariance of the asset's returns and the market returns

- Variance (rm) is the variance of the market returns.

Formula Explained

The beta formula in finance represents the level of systematic risk of a particular stock or portfolio in relation to the overall stock market. The formula simply measures the covariance between the stock's returns and the returns of the overall market (also known as the market portfolio), divided by the variance of the market portfolio.

Covariance is a measure of how closely two variables (in this case, the stock's returns and the returns of the overall market) move together, and it signifies the degree of correlation between them. For instance, a positive covariance means that when one variable goes up, the other variable tends to go up as well. In the context of portfolio management, a high covariance between a stock and the market portfolio means that the stock's returns are closely linked to changes in the overall market, indicating a higher level of risk.

Variance, on the other hand, is a statistical term that measures how spread out a set of data (in this case, the market portfolio's returns) is from its average value. It represents the level of risk inherent in the market portfolio. If the variance of the market portfolio is high, it means that there is greater uncertainty in the returns of the overall market, which leads to a greater level of risk for individual stocks or portfolios that are correlated with the market.

Therefore, the beta formula's use of covariance and variance serves to calculate a measure of a stock's sensitivity to market risk. In simpler terms, it shows how much a stock's returns tend to move alongside changes in the overall market returns, and it allows investors to gauge its potential risk and return in comparison to the market as a whole.

Explanation of Beta

1. Beta calculation: Beta measures the volatility of a particular stock or asset class in relation to the overall market. A beta of 1 means that the stock or asset class has the same volatility as the market, while a beta greater than 1 means it is more volatile and less than 1 means it is less volatile. To calculate beta, you can use a finance website that provides this information, or you can use historical pricing data and calculate beta using a spreadsheet or calculator.

2. Expected return calculation: Expected return is the return that an investor can expect to earn on an investment over time. To calculate the expected return for a commercial property investment, you can multiply the potential rental income by the expected occupancy rate and then add any expected appreciation in property value.

3. Risk premium calculation: The risk premium is the extra return that an investor expects to earn in exchange for taking on additional risk. To calculate the risk premium for a commercial property investment, you can subtract the risk-free rate (such as the return on a government bond) from the expected return on the investment.

4. Sharpe ratio calculation: The Sharpe ratio measures the risk-adjusted return of an investment. A higher Sharpe ratio indicates a better risk-adjusted return. To calculate the Sharpe ratio, you can subtract the risk-free rate from the expected return, and divide the