Average Return Calculator
Calculate arithmetic and geometric average return on investments.
Results
What Is an Average Return Calculator?
An average return calculator computes the arithmetic mean, geometric mean (CAGR), standard deviation, and total growth multiple from a series of annual investment returns.
How to Use This Calculator
- Enter your annual returns as percentages, separated by commas or new lines.
- Click Calculate to see the arithmetic and geometric averages, volatility, and total growth.
Frequently Asked Questions
What is the difference between arithmetic and geometric return?
Arithmetic return is the simple average. Geometric return (CAGR) accounts for compounding and is usually lower and more accurate for measuring actual portfolio growth.
Why does geometric return matter?
Because investment returns compound over time. A 50% gain followed by a 50% loss does not break even; the geometric return captures this effect.
What is standard deviation in this context?
It measures the volatility or dispersion of annual returns around the average. Higher standard deviation means higher risk.
Can I use negative returns?
Yes. Enter negative values for down years just like positive values for up years.