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Having trouble understanding how to best solve my problem. I have monthly returns (not prices). Initially simple returns, but i have transformed them to log returns. i have this for both the s&p 500 and US-bonds, and want to make them annual. whats the formula for making log returns annual? and how can i make the bonds annual? is the best way to sum every 12th months and take the mean? Or can i simply just multiply the months with 12? (for bonds). In this case i will have hundreds of annual returns for bonds and only about 50 for the stocks. Any help is appreciated

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  • $\begingroup$ I'm voting to close this question as off-topic because it belongs to finance domain not statistics $\endgroup$
    – Aksakal
    Sep 10, 2019 at 19:15

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If you had returns, you would multiply 12 of them (composite interest formula) to obtain the annual return. If you have the logs, I think you can simply add them up (running sum) to obtain the log return of a whole year to date; but I think you should not divide by 12.

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