Category: calculators

  • Return volatility formula and calculator

    Return volatility formula and calculator

    We start this lesson by discussing what is meant by (stock) return volatility. Then, we explain the return volatility formula. Finally, a simple return volatility calculator is provided for your convenience. Jump to: What is (stock) return volatility? Return volatility formula Return volatility calculator What is (stock) return volatility? Imagine an investor who bought shares […]

  • Arithmetic average return calculator and formula

    Arithmetic average return calculator and formula

    In this lesson, we introduce a simple yet really useful measure of investment performance. In particular, we discuss the arithmetic average return formula and provide a practical arithmetic average return calculator. It is really important for investors to be able to accurately assess the performance of their investments. In that sense, arithmetic average (or mean) […]

  • Geometric average return calculator and formula

    Geometric average return calculator and formula

    In this post, we explain the geometric average return formula using numerical examples and discuss how it differs from the arithmetic average return. We provide a practical geometric average return calculator as well. Jump to: Geometric average return formula Geometric average return calculator Geometric average vs arithmetic average Geometric average return formula The geometric average […]

  • Treynor ratio formula and calculator

    Treynor ratio formula and calculator

    As part of our investments course, we have already covered two important investment performance measures: Jensen’s alpha and Sharpe ratio. In this post, we focus on the Treynor ratio, which is another popular risk-adjusted performance measure. In particular, we explain the Treynor ratio formula and offer an easy-to-use Treynor ratio calculator as well. Jump to: […]

  • Jensen’s alpha formula and calculator

    Jensen’s alpha formula and calculator

    When evaluating the performance of mutual funds, ETFs, or your own portfolio, it is vital to do that on a risk-adjusted basis. That is, it would be misleading to compare investment opportunities on the basis of returns only as higher returns normally require bearing more risk. In this post, we discuss one of the most […]

  • Sharpe ratio calculator, formula, examples

    Sharpe ratio calculator, formula, examples

    The Sharpe ratio is a popular tool used in performance evaluation. In this post, we offer a Sharpe ratio calculator as well as explain the formula with examples. Jump to The Sharpe ratio formula Using the Sharpe ratio to evaluate performance – an example Ex-ante vs ex-post Sharpe ratio The Sharpe ratio vs the Treynor […]

  • The risk of a portfolio – Calculator and formula

    The risk of a portfolio – Calculator and formula

    We often say that risk and return are two sides of the same coin. You can’t discuss one without the other. In the previous post, we showed you how to calculate the return on a portfolio of assets. In this post, we explain the formula for portfolio risk. We also offer an easy-to-use portfolio risk […]

  • Portfolio return calculator and formula

    Portfolio return calculator and formula

    In this post, we explain the formula behind the calculation of portfolio returns. Furthermore, we provide a free online portfolio return calculator, which works as a portfolio expected return calculator as well as a portfolio realized return calculator. Finally, with this port, we make an introduction to the modern portfolio theory as well. So far […]

  • Expected return calculator and formula

    Expected return calculator and formula

    When evaluating an asset’s past performance, we can make use of the historical (or realized) average return. In that sense, the historical average return is a backward-looking measure. But, in order to forecast an asset’s future performance, we need a forward-looking measure. This measure is called the expected return. In this post, we explain the […]

  • Holding period return calculator and formula

    Holding period return calculator and formula

    In this post, we explain the holding period return formula with examples and offer an easy-to-use holding period return calculator. When investors buy securities (e.g., stocks), they may hold them for months or years before selling them. The duration during which an investor holds on to a particular security is known as the holding period […]