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For calculating the market return, the average daily returns of S&P 500 or Nasdaq or any other Index (that represents a 'market') over the last few years (say 5 years) can be computed. These daily returns are then annualized (average daily return * 365).
In Excel, you can download the daily closing prices of the index. Calculate daily returns of the Index using the formula (P1 / P0 - 1), (P2 / P1 - 1) and so on.... This will give you daily returns on the stock.
Calculate the average of all the values (daily returns) obtained using "Average" function.
Annualise the returns as (Average Daily Return * 365)
You can get stock prices in Excel format with the spreadsheet in the related link. It automatically downloads historical prices from Yahoo
Thanks
Vikash
Wiki User
∙ 12y ago
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