The beta factor is derived by performing a least squares regression between adjusted prices of the stock and the corresponding Datastream market index. The historic beta so derived is then adjusted using Bayesian techniques to predict the probable behaviour of the stock price on the basis that any extreme behaviour in the past is likely to average out in the future. This adjusted value, or "forecast" beta, is represented by the BETA datatype. The Datastream beta factor is calculated using stock prices and market indices as the only variables.
