The Chamber of Secrets has been opened… (to prices transformation!). In this entry, we discover the secrets behind prices transformation in financial series.
Do you use price series in things such as technical analysis visualisation?
Do you use return series in things such as volatility calculations?
Do you use equity series in things such as comparing products with prices on different scales?
If you answered ‘yes’ to at least two of these questions, look at the images below. Here are visual, definitive guides to transformation between these three types of time series:
But wait! In this post we recommend using logarithmic returns…