Weighting of CAGR for multiple share purchases
Posted: 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.
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.