Step 2: Calculate Returns

Step 2: Calculate Returns | Finance Train

We'll calculate both simple returns and log returns using pandas and numpy packages.

1import numpy as np
2
3# Calculate simple returns
4stock_data['Simple Returns'] = stock_data['Close'].pct_change()
5# Calculate log returns
6
7stock_data['Log Returns'] = np.log(stock_data['Close'] / stock_data['Close'].shift(1))
8
9# Display the returns to confirm
10
11stock_data[['Close','Simple Returns','Log Returns']].head()
12

python

This code calculates two types of financial returns from stock closing prices and displays them along with the closing prices. Here's a breakdown of the steps:

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