A simple return measures a stock’s ordinary proportional price change from one closing price to the next: (current close − previous close) / previous close. It provides a direct daily performance metric for comparing investments. section 3.4.2
Use simple returns to:
- Convert closing-price series into percentage changes. section 3.4.2
- Compare stock performance across a selected period. section 3.4.2
- Distinguish ordinary returns from logarithmic returns, which represent continuously compounded rates and support statistical analysis. section 3.4.2
simple_returns = hist_prices_24 ["Close"].pct_change (fill_method=None).dropna() simple_returns
The Python listing calculates simple returns from historical closing prices with pct_change and removes the initial missing observation. section 3.4.2
Reading return behavior
After calculating returns, plot a histogram to inspect how frequently unusually large movements occur. Pairing returns with mean, standard deviation, and variance helps describe performance and fluctuation. section 3.4.2
