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1 year Jan Feb Mar Apr May Geomean
$1.000 $1.144 $1.074 $994 $962
14% -6% -7% -3%
$1.000 $1.159 $1.158 $944 $1.036
16% 0% -18% 10%
$1.000 $1.112 $914 $1.217 $1.214
11% -18% 33% 0%
Avg values $1.000 $1.138 $1.049 $1.052 $1.071
Monthly return 1,14 0,92 1,00 1,02 1,722% = 1,722%
CAGR formula matches averaging values perfectly
Avg geomeans 1,14 0,92 1,02 1,02 2,292%
Geomean of averaged monthly geomeans - geomean of averaged monthly values 0,570%
how can I paste it?
how can I attach it?
1 year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Geomean
$1.000 $1.285 $1.153 $815 $1.362 $905 $1.041 $859 $931 $1.027 $878 $860 $1.038
29% -10% -29% 67% -34% 15% -17% 8% 10% -15% -2% 21%
$1.000 $985 $1.195 $1.251 $929 $830 $1.049 $1.295 $963 $1.139 $1.173 $1.057 $1.231
-2% 21% 5% -26% -11% 26% 23% -26% 18% 3% -10% 16%
$1.000 $1.153 $910 $1.187 $802 $1.235 $923 $1.308 $1.205 $806 $949 $992 $919
15% -21% 30% -32% 54% -25% 42% -8% -33% 18% 5% -7%
1) Avg values $1.000 $1.141 $1.086 $1.084 $1.031 $990 $1.004 $1.154 $1.033 $991 $1.000 $970 $1.063
Monthly return 1,14 0,95 1,00 0,95 0,96 1,01 1,15 0,90 0,96 1,01 0,97 1,10 0,508% = 0,508%
CAGR formula matches averaging values perfectly
2) Avg geomeans 1,14 0,97 1,02 1,03 1,03 1,05 1,16 0,92 0,98 1,02 0,98 1,10 3,097%
Geomean of averaged monthly geomeans - geomean of averaged monthly values 2,589%
obviously, monthly return and avg geomeans differ in some months.
But I don't know why the final geomean for the whole period is always higher.
Can you help please?
Thank you
Hi there,
Given N sets of values, I'm trying to figure out why averaging the returns per period across sets of values always produces a higher geomean than
first averaging the values per period across tests, then calculating period-to-period returns, and then taking the geomean of those returns.
I used the RAND function for each value as to quickly iterate different "tests".
Thank you
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