{"id":1251,"date":"2025-02-28T00:35:35","date_gmt":"2025-02-28T00:35:35","guid":{"rendered":"https:\/\/diversiview.online\/help\/?p=1251"},"modified":"2025-03-14T00:17:41","modified_gmt":"2025-03-14T00:17:41","slug":"what-are-historical-expected-returns","status":"publish","type":"post","link":"https:\/\/diversiview.online\/help\/what-are-historical-expected-returns\/","title":{"rendered":"What Are Historical Expected Returns?"},"content":{"rendered":"\n

For each investment, the historical expected return is calculated as the annualised geometric (compound) average of its daily returns over the past three years<\/strong>.<\/p>\n\n\n\n

Daily returns are calculated as the percentage change in the investment’s price from one day to the next. For securities younger than three years, the calculation is based on the available data.<\/p>\n\n\n\n

Note:<\/strong> When comparing investments based on their historical expected returns, ensure that you compare securities of similar age. Otherwise, the comparison may be inaccurate due to differences in the calculation periods.<\/p>\n\n\n\n

Example \u2014 Using Historical Expected Returns to calculate Portfolio Expected Return (values valid as at 20\/1\/2025<\/strong>)<\/h2>\n\n\n\n

Consider a hypothetical portfolio consisting of the following stocks:<\/p>\n\n\n\n