Given that the Daily return of a stock is calculated by ln(today price/yesterday price)
What is the ideal way to calculate portfolio return?
- will it be ln(portfolio value today/ portfolio value yesterday)
OR
- w1*daily return of stock1+ w2*daily return of stock2 ...
where w1, w2 are weights and daily return of stock is calculated by ln(today stock price/yesterday stock price)
Which is more appropriate?
What is the ideal way to calculate portfolio return?
- will it be ln(portfolio value today/ portfolio value yesterday)
OR
- w1*daily return of stock1+ w2*daily return of stock2 ...
where w1, w2 are weights and daily return of stock is calculated by ln(today stock price/yesterday stock price)
Which is more appropriate?
