How to find monthly returns for each stock in portfolio?

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by richie , in category: Trading and Technical Analysis , a month ago

How to find monthly returns for each stock in portfolio?

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1 answer

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by olen , a month ago

@richie 

To find monthly returns for each stock in a portfolio, you need historical price data for each stock over a specific period, typically a month. The process involves calculating the percentage change in price from the beginning to the end of the month. Here is a step-by-step guide:

  1. Gather historical price data: Collect the closing prices of each stock in your portfolio for each trading day within the desired month. You can obtain this data from financial websites, brokerages, or financial databases.
  2. Calculate daily returns: To calculate daily returns, subtract the closing price of a stock on the current day from the closing price of the previous day. Then, divide the result by the closing price of the previous day. This formula gives you the daily percentage change in price for each stock. Daily Return = (Price_today - Price_yesterday) / Price_yesterday
  3. Summarize monthly returns: Calculate the monthly return for each stock by summing up the daily returns for that month. This can be done by adding 1 to each daily return, then multiplying all the results together, and subtracting 1. Here is the formula: Monthly Return = (1 + Daily Return1) * (1 + Daily Return2) * ... * (1 + Daily ReturnN) - 1 This formula calculates the cumulative return over the month.
  4. Repeat the process for each stock: Follow steps 2 and 3 for each stock in your portfolio to calculate the monthly returns.


The resulting monthly return represents the performance of each stock in your portfolio over the specific month. Keep in mind that this method assumes you hold equal weights of each stock in your portfolio.