1. What is Daily Return?

Daily return measures the percentage change in the value of an investment from the beginning to the end of a single day. It's a fundamental metric for assessing short-term investment performance.

2. How Does the Calculator Work?

The calculator uses the daily return formula:

Where:

• End Value — The value of the investment at the end of the day
• Start Value — The value of the investment at the beginning of the day

Explanation: This formula calculates the percentage gain or loss on an investment over a single trading day.

3. Importance of Daily Return Calculation

Details: Daily return is essential for tracking investment performance, assessing volatility, making daily trading decisions, and comparing short-term performance across different investments.

4. Using the Calculator

Tips: Enter the starting value and ending value of your investment in dollars. Both values must be positive numbers, with the start value greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: Can daily return be negative?
A: Yes, if the end value is less than the start value, the daily return will be negative, indicating a loss for that day.

Q2: How is daily return different from annual return?
A: Daily return measures performance over one day, while annual return measures performance over a full year, typically incorporating compounding effects.

Q3: Should I include dividends in the end value?
A: For accurate total return calculation, yes. The end value should include both price changes and any dividends or distributions received that day.

Q4: What's considered a good daily return?
A: This varies by asset class and market conditions. For stocks, 0.5-1% might be considered good, while for more volatile assets, higher returns (and losses) are common.

Q5: How can I annualize daily returns?
A: To estimate annual return from daily return: (1 + daily return)^252 - 1 (assuming 252 trading days in a year).