How to Calculate Historical Return

Đăng ngày 06/03/2024 lúc: 09:35533 lượt xem
How to Calculate Historical Return

By calculating historical return, you can evaluate how the value of a stock has changed over time. The basic formula for historical rate of return is the new value minus the old value divided by the new value.

Get Historical Information

Find historical price data for the stock you want to measure. Yahoo Finance provides comprehensive historical stock price information. To get stock information from the Yahoo Finance website, search for the stock by stock name or stock symbol. On the stock summary page, select Historical Prices. Input the date range for the historical period you want to measure and select Download to Spreadsheet.

Alternatively, you can get stock information from another financial information website, like MarketWatch, or directly from a stock exchange like Nasdaq. Many companies also provide this data in the investor relations portion of their websites.

Calculate the Return

  1. Open the stock price data in a spreadsheet program like Microsoft Excel. Sort the data so the first column shows historical dates in descending order and the second column contains the corresponding stock price on that date. Delete any columns labeled Open, High, Low, Close and Volume; you won’t need that information to calculate the return.
  2. Subtract the beginning adjusted close price from the ending adjusting close price for the period you want to measure. For example, say you’re measuring the historical return of the stock for 2014. If the adjusted close price was $100 on Jan. 1, 2014, and $150 on Dec. 31, 2014, the difference is $50.
  3. Divide the difference between the ending and beginning close price by the beginning close price. In this example, that would be the $50 difference divided by the beginning adjusted close of $100, or 0.5. This calculation shows that the stock experienced a 50 percent historical return during the specified period.

Historical Return for Other Investments

You can measure the historical return of any investment, not just a single stock. For example, you can measure the historical return of the entire S&P 500 by getting the historical prices from the Yahoo Finance page. You can also search for data about a specific mutual fund or index fund. Follow the same formula — new price minus old price divided by old price — to measure the historical return on a physical asset, such as a real estate investment, precious metals or collectible items.

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