| I get an e-mail that asks about calculating the Compound Annual Growth Rate and how it varies over time. So I whip out a spreadsheet and play, downloading 10 years worth of monthly stock prices then calculating the CAGR (or annualized return) over a moving 3-year window. For example:  There's a description here. The interesting thing is to notice the correlation between the CAGR and the Volatility. For KO (that's Coca-Cola, eh?), the correlation is -71% Must have something to do with cocaine.  |
Sunday, January 17, 2010
CAGR
Subscribe to:
Post Comments (Atom)
Maybe,in the future, we will be able to buy futures on cocaine, heroin, Crestor, Plavix, and even aspirin. That would be a great addition to our portfolios for diversification. ;-D
ReplyDeleteAlas, we're too late:
ReplyDeletehttp://i47.tinypic.com/15g4eu0.gif
I see they even have "Livestock" Futures such as Palmetto Bugs, Coyotes, Silkworms, & Gossamer Spiders now >>>
ReplyDeletehttp://www.youtube.com/watch?v=2z07dB3sKTs
@ @
D
===