Returns Distributions for AAPL, SBUX, FB
The Returns Distribution Histogram, available via the Symbol Search (Quote) section of TradingMarkets Analytics, allows users to see what the simulated historical returns look like for any stock over various periods of time from 1 day to 1 year. These are rolling periods of trading days. Since a year represents 252 trading days, the histogram looks at every 252 day period since 2001 when calculating the returns distribution for 1-year for the examples below.
The header of the chart tells us the average, minimum and maximum return for the time period as well as the percentage of positive returns (winning) for the number of occurrences. The shaded areas represent the approximate 1, 2, and 3 standard distributions.
Looking at the 1-year histogram gives traders insight as to how they can expect the stock to perform over longer periods of time.
This chart shows the rolling 1 year returns for Apple Inc., since January 2001, with an average 1 year return of 54% based on 2,875 occurrences with 80% of those occurrences showing positive gains.
This chart shows the rolling 1 year returns for Starbucks, since January 2001, with an average 1 year return of 24% based on 2,888 occurrences with 75% of those occurrences showing positive gains.
This chart shows the rolling 1 year returns for Facebook, since May 2012, with an average 1 year return of 60.69% based on 112 occurrences with 60% of those occurrences showing positive gains.
As noted in the MTA’s (Market Technician Association) June 2013 “Technically Speaking” Newsletter, the TradingMarkets Analytics Returns Distribution chart provides “valuable information and is not readily available anywhere else. It could help traders understand whether or not the performance of [equities] matches their expectations.”
If you are interested in analyzing the distribution of returns for your favorite stocks or ETFs you can get a quote on TradingMarkets Analytics.