I've taken three months of price return data for two instruments and calculated a $\beta$ between the two using the formula $\beta = \frac{Cov(x,y}{Var(y)}$ with the goal of estimating what the percentage change in instrument $y$ should be based on what the percentage change in instrument $x$ is.
I have been applying this by multiplying $\beta$ by the percentage change of $x$ to determine a beta-adjusted percentage change for $y$, but I am wondering if I should actually multiply the derived $\beta$ by the current percentage change of $y$ instead. Could anyone shed some light on whether or not I am properly applying this $\beta$ to arrive at an expected percentage change for $y$?