how to calculate cumulative returns from daily returns

Expressing the cumulative rates of return in terms of annualized rates of return makes the performance comparison a bit more manageable, optically, but it isn't a panacea. 0 Two MacBook Pro with same model number (A1286) but different year. 1Return Calculations 1.1The Time Value of Money 1.1.1Future value, present value and simple interest 1.1.2Multiple compounding periods 1.1.3Effective annual rate 1.2Asset Return Calculations 1.2.1Assets 1.2.2Simple returns 1.2.3Continuously compounded returns 1.3Portfolios and Portfolio Returns 1.3.1Multiperiod portfolio returns and rebalancing Calculate the cumulative return series as follows: cumprod(1+rt): this basically boils down to: end of day 1: daily return 5%, cumulative return: 1 * (1 + 5%) = 1.05, end of day 2: daily return 3%, cumulative return: 1.05 * (1 + 3%) = 1.0815 t Conversely, Microsoft's annualized return over the first 13.36 years of its life as a public company -- the same period that Netflix has just reached -- was 58.77%. Thanks for contributing an answer to Stack Overflow! Dive in for free with a 10-day trial of the OReilly learning platformthen explore all the other resources our members count on to build skills and solve problems every day. This image is not<\/b> licensed under the Creative Commons license applied to text content and some other images posted to the wikiHow website. i e Making statements based on opinion; back them up with references or personal experience. This compensation may impact how and where listings appear. It is always good to visualize the returns to better understand the stocks performance. It is better if you can share a simplified pbix file. How to Calculate Cumulative Returns in Excel?Using The NASDAQ as an example, this video tutorial shows how to calculate daily returns in Excel and how to cal. 0 If the period is short, with the effect of compounding, it can produce some very large (positive or negative) numbers that aren't meaningful. Federal Reserve regulations are rules put in place by the Federal Reserve Board to regulate the practices of banking and lending institutions, usually in response to laws enacted by the Congress. Another way of putting it is that one share today is equivalent to 1/288th of a share when they started trading. i Were committed to providing the world with free how-to resources, and even $1 helps us in our mission. Has the cause of a rocket failure ever been mis-identified, such that another launch failed due to the same problem? @EndreMoen - Is possible post new question with sample data, expected output? r Compute cumulative returns from simple daily returns Visualize the returns Scouring the Internet for a formula to compute the cumulative return of a stock lead us to something like this: c u m p r o d ( 1 + R t) 1 Here are few definitions, math formulas and expansions to explain the mystery of the product operation and adding/subtracting the 1.