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Weighting of CAGR for multiple share purchases

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jaizan
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Weighting of CAGR for multiple share purchases

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Postby jaizan » April 2nd, 2021, 2:28 pm

Is there an established method of weighting CAGR compound average growth rate for multiple share purchases in a stock ?

As an example, I've got one stock with 25 trades over the last 11 years, mainly purchases. All of different sizes, and with different time periods between each trade.

I can easily calculate the individual CAGR for each purchase, measured until today.

However, when I have 25 trades of different sizes and different intervals, I'm not sure what method is appropriate to get an overall CAGR.

If I average, it can be distorted as a purchase 6 months ago has an enormous annualized CAGR, so it needs weighting for duration and volume.

Of course, weighting by both volume and duration gives a value which is too low.

Alaric
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Re: Weighting of CAGR for multiple share purchases

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Postby Alaric » April 2nd, 2021, 2:33 pm

jaizan wrote:However, when I have 25 trades of different sizes and different intervals, I'm not sure what method is appropriate to get an overall CAGR.


The XIRR function in a spreadsheet using a list of purchase amounts and dates.


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