Compounded Return
A Compounded Return is a measurement of the change of an investment over a time range when individual returns over all subsets of the time range are known. This is equivalent to reinvestment in the investment each time period.
Compounded Returns are calculated using the formula below:
Where
- rc
- Compounded Return
- ri
- return over period i
If ri is missing, that return is ignored and thus in effect treated as a return of 0. If all returns are missing, the result is also missing.