Daily Rate of Return Calculator
Calculate daily performance based on asset values or convert annual rates.
Based on Asset/Portfolio Performance
Convert Annual Rate to Daily Rate
Daily Return: 0.00%
Beginning Value:$' + start.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '
';
html += 'Ending Value:$' + end.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '
';
html += 'Total Gain/Loss:$' + (end – start).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + '
';
html += 'Total Return (Period):' + totalReturnPercent.toFixed(2) + '%
';
html += 'Daily Return (Compounded):' + dailyRatePercent.toFixed(5) + '%
';
html += 'Daily Return (Simple):' + simpleDaily.toFixed(5) + '%
';
} else {
// Annual to Daily Conversion
var annual = parseFloat(document.getElementById('annualRate').value);
if (isNaN(annual)) {
mainResult.innerHTML = "Please enter a valid rate.";
mainResult.style.color = "#d9534f";
detailRows.innerHTML = "";
return;
}
mainResult.style.color = "#0073aa";
// Simple method (Divide by 365)
var simpleDaily = annual / 365;
// Compound method (Geometric)
// Formula: ((1 + r)^ (1/365) – 1) * 100
// Note: annual input is percent, convert to decimal first
var annualDecimal = annual / 100;
var compoundDailyDecimal = Math.pow(1 + annualDecimal, 1 / 365) – 1;
var compoundDailyPercent = compoundDailyDecimal * 100;
// Trading days method (Divide by 252)
var tradingDaily = annual / 252;
mainResult.innerHTML = "Daily Rate (Compound): " + compoundDailyPercent.toFixed(4) + "%";
html += 'Input Annual Rate:' + annual.toFixed(2) + '%
';
html += 'Daily Rate (365 Day Compound):' + compoundDailyPercent.toFixed(5) + '%
';
html += 'Daily Rate (365 Day Simple):' + simpleDaily.toFixed(5) + '%
';
html += 'Daily Rate (252 Trading Days):' + tradingDaily.toFixed(5) + '%
';
}
detailRows.innerHTML = html;
}
Understanding the Daily Rate of Return
The Daily Rate of Return Calculator is an essential tool for day traders, portfolio managers, and financial analysts who need to measure asset performance on a granular level. Unlike annual returns which smooth out volatility, the daily rate of return exposes the day-to-day fluctuations of an investment.
This calculator offers two distinct modes of calculation:
- Asset Performance Mode: Calculates the average daily growth rate required to get from a starting balance to an ending balance over a specific number of days.
- Rate Conversion Mode: Converts a known Annual Percentage Yield (APY) or Annual Return into a daily percentage, accounting for compounding.
Why Calculate Daily Returns?
Monitoring daily returns is crucial for calculating volatility (standard deviation of daily returns) and risk metrics like Value at Risk (VaR). High volatility in daily returns indicates higher risk, even if the annual return looks stable. It is also the primary metric for day traders whose time horizon is less than 24 hours.
How to Calculate Daily Rate of Return
There are different ways to calculate this metric depending on the data you have available.
1. From Asset Prices (Geometric Average)
If you know your portfolio value at the start and end of a period, the geometric average daily return represents the constant daily rate that would compound the starting value to the ending value.
Formula:
Daily Rate = ( (Ending Value / Beginning Value)(1 / Days) – 1 ) × 100
Daily Rate = ( (Ending Value / Beginning Value)(1 / Days) – 1 ) × 100
2. From Annual Rate (Compound Interest)
To convert an annual effective rate to a daily rate while accounting for compounding, use the geometric root formula.
Formula:
Daily Rate = ( (1 + Annual Rate)(1 / 365) – 1 ) × 100
Daily Rate = ( (1 + Annual Rate)(1 / 365) – 1 ) × 100
3. Simple Interest Method
For rough estimates or non-compounding instruments, the simple interest method divides the annual rate by the number of days in the year.
Formula:
Daily Rate = Annual Rate / 365
Daily Rate = Annual Rate / 365
Example Calculation
Imagine an investor starts with $10,000. After 20 days, the portfolio has grown to $10,500.
- Total Gain: $500 (5.00%)
- Simple Daily Average: 5.00% / 20 = 0.25%
- Compounded Daily Average: ((10500 / 10000)^(1/20) – 1) = 0.244%
While the difference between 0.25% and 0.244% seems small, over long periods with large capital, the compounding effect creates a significant divergence in actual profit.