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Learn Challenge: Calculate Daily Returns | Financial Data Analysis with Python
Python for FinTech

bookChallenge: Calculate Daily Returns

Understanding how a stock's price changes from one day to the next is crucial for anyone working in finance. One of the most common ways to measure these changes is by calculating daily returns. A daily return tells you the percentage change in a stock's price compared to the previous day's closing price. This measure helps you assess how volatile a stock is, compare performance across different assets, and even build more advanced financial models. By expressing returns as percentages, you can easily compare stocks with different price levels, making it a fundamental metric for both analysis and reporting in the world of finance.

Task

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Implement a function that receives a list of daily closing prices for a stock and returns a list of daily percentage returns, rounded to four decimal places.

  • For each day after the first, calculate the percentage change from the previous day's price.
  • Round each daily return to four decimal places.
  • Return a list containing these daily returns.

Solution

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SectionΒ 1. ChapterΒ 3
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bookChallenge: Calculate Daily Returns

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Understanding how a stock's price changes from one day to the next is crucial for anyone working in finance. One of the most common ways to measure these changes is by calculating daily returns. A daily return tells you the percentage change in a stock's price compared to the previous day's closing price. This measure helps you assess how volatile a stock is, compare performance across different assets, and even build more advanced financial models. By expressing returns as percentages, you can easily compare stocks with different price levels, making it a fundamental metric for both analysis and reporting in the world of finance.

Task

Swipe to start coding

Implement a function that receives a list of daily closing prices for a stock and returns a list of daily percentage returns, rounded to four decimal places.

  • For each day after the first, calculate the percentage change from the previous day's price.
  • Round each daily return to four decimal places.
  • Return a list containing these daily returns.

Solution

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Everything was clear?

How can we improve it?

Thanks for your feedback!

SectionΒ 1. ChapterΒ 3
single

single

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