THE NUMORIX GUIDE
How to use the Average Return Calculator
Last reviewed September 14, 2026
What this calculator does
The calculator parses comma-separated return percentages, ignores entries that cannot be parsed as numbers, and computes arithmetic mean as sum divided by count.
Formula and method
The calculator parses comma-separated return percentages, ignores entries that cannot be parsed as numbers, and computes arithmetic mean as sum divided by count. Geometric mean is the nth root of the product of (1 + return/100) minus 1. Volatility is sample standard deviation, dividing squared deviations from the arithmetic mean by n - 1.
Variables and inputs
Enter annual returns as a comma-separated string such as 8, 12, -5. The years field exists in the input type but the current component does not use it; each parsed return is treated as one observation. Results are percentages.
Worked example
For two annual returns of 10% and -10%, arithmetic mean is (10 + -10) / 2 = 0%. Geometric mean is sqrt(1.10 x 0.90) - 1 = about -0.50%, showing the effect of compounding. Sample volatility is sqrt(((10 - 0)^2 + (-10 - 0)^2) / (2 - 1)) = 14.14%.
How to interpret the result
Arithmetic mean summarizes the average observation, while geometric mean summarizes the compounded path when returns are usable. Volatility shows dispersion, not a guarantee of future risk or a complete measure of portfolio loss.
Common mistakes to avoid
Keep the minus sign on negative years. Do not use an arithmetic average as an annualized growth rate when returns compound. Check for accidental text or blank entries because the parser silently ignores values it cannot parse.
Assumptions and limitations
The result is unweighted and assumes each parsed return represents one equal period. It does not account for deposits, withdrawals, fees, taxes, serial correlation, benchmark choice, or returns below -100% that make geometric compounding invalid.