How do you calculate beta of the stocks with example?

Beta is calculated by comparing the returns of a stock to the returns of a benchmark index, typically the S&P 500. The formula for beta is:

[ \beta = \frac{\text{Covariance}(\text{Stock Returns}, \text{Market Returns})}{\text{Variance}(\text{Market Returns})} ]

For example, if a stock has a covariance with the market of 0.02 and the variance of the market returns is 0.01, the beta would be calculated as 0.02 / 0.01 = 2. This indicates that the stock is twice as volatile as the market.