SYNTHSIGNAL / RESEARCH TOOLS
What does a market move really mean?
Calculate the change. Check the comparison. Understand the denominator.
The key idea: percentages depend on where you start. A fall from 100 to 80 is a 20% loss; returning from 80 to 100 requires a 25% gain. Cash income can change your overall result even when a price chart goes nowhere.
Check your numbers
Use prices per share or token in one currency, over the same period. Cash means dividends or distributions received per unit, held as cash. The starting values below are a hypothetical example.
- Price return
- -20%
- Return including cash
- -20%
- Price gain to recover the starting price
- +25%
Gross returns for the whole period, before fees and taxes. Recovery compares prices only; it ignores cash received and does not predict a recovery.
Calculations happen in your browser. Inputs are not sent to SynthSignal or saved. This tool does not fetch prices or connect to an account.
1. Price change is only one part of a return
A quote tells you the price of one unit. A price return compares that price with an earlier price. It does not include cash a holder received along the way. FINRA distinguishes the change in an investment’s value from the income it produces; both contribute to total return.
Our calculator uses a simple holding-period convention: you keep the same number of units and hold any distributions as cash. It does not reinvest dividends. If you have added money, sold part of a position or reinvested payouts, your account performance needs a cash-flow-aware calculation instead.
Source: FINRA: return and rate of return
2. Follow the calculation
- Price return
- (Ending price − starting price) ÷ starting price × 100
- Return including cash
- (Ending price − starting price + cash received per unit) ÷ starting price × 100
- Price recovery after a loss
- (Starting price ÷ ending price − 1) × 100
The recovery formula uses the lower ending price as its base. That change of denominator is why a loss and an equal percentage gain do not cancel. When an asset reaches zero, there is no finite percentage increase from zero that restores its former price.
Worked example: the “back to even” mistake
Suppose a hypothetical asset falls from 100 to 80. A subsequent gain of 20% adds 16, taking it to 96. You remain 4% below the original 100. A gain of 25% adds 20 and restores the original price. These are arithmetic examples, not forecasts.
3. Read the same chart two ways
Imagine a share begins at 100, ends at 100 and pays 4 in cash during your holding period. Its price return is 0%; its return including that cash is 4%, before costs. Now change the ending price to 90: the price return is −10%, while including the same cash reduces the loss to −6%. A payout does not automatically make an investment profitable.
Enter actual cash per share for the period, not a quoted annual dividend yield. A 4% annual yield cannot simply be entered as “4” for every price and time window. Likewise, token rewards paid in additional units cannot be treated as a cash amount without a separate valuation and accounting for those units.
4. Check the inputs before comparing assets
- Time window: compare the same start and end dates. A one-month change and a one-year change answer different questions. These results are not annualized.
- Currency: use one currency throughout. A USD return does not include the exchange-rate effect for someone measuring wealth in CAD.
- Corporate actions: use comparable, split-adjusted units. A two-for-one stock split doubles the share count while halving the price per share, before other market changes; that is not a 50% economic loss.
- Dividend adjustment: do not add cash again if your data already represents a dividend-adjusted total-return series. Check the provider’s definition.
- Execution: a quoted price is not a guarantee that you can trade every unit at that price. Spreads, liquidity, fees and taxes are excluded here.
Source: Investor.gov: how stock splits change share counts and prices
By SynthSignal · Published · Editorial method. Educational arithmetic, not a recommendation or a prediction. Report a correction.