calculate YoY growth rate

Hi,friend,

price2ret function is able to calculate the growth rate of two adjacent values, if it's monthly data, it can be viewed as month over month change, can I use this function to calculate year over year change on the same monthly data series? thanks

Answer 1

[Piyush Kumar]

Hi,

You can calculate year over year change on the same monthly data series.

For example, I have created dummy data for 24 months. To calculate YoY growth rated, we will pass data with gap of 12 months, like Jan 2023 and Jan 2024.

% Generate dummy data for 24 months (2 years)
months = 1:24;
data = 100 + cumsum(randn(1, 24)); % Starting at 100 and adding random changes

% Initialize arrays to store MoM and YoY growth rates
mom_growth_rate = zeros(1, 23); % 23 because MoM is between adjacent months
yoy_growth_rate = zeros(1, 12); % 12 because YoY is between same months in consecutive years

% Calculate MoM growth rates
for i = 2:24
    mom_growth_rate(i-1) = price2ret([data(i-1), data(i)]);
end

% Calculate YoY growth rates
for i = 13:24
    yoy_growth_rate(i-12) = price2ret([data(i-12), data(i)]);
end

% Display results
disp('Monthly Data:');

Monthly Data:

disp(data);

  Columns 1 through 18

  100.4717   98.9071   97.1829   96.8052   97.3194   97.3258   97.6066   99.1177   98.9409   98.4027   98.3130   99.1845  100.9937  100.2317  101.1831  101.5197  102.4079  104.3278

  Columns 19 through 24

  104.3520  105.3635  104.8089  103.4179  104.7385  103.2417

disp('MoM Growth Rates:');

MoM Growth Rates:

disp(mom_growth_rate);

  Columns 1 through 18

   -0.0157   -0.0176   -0.0039    0.0053    0.0001    0.0029    0.0154   -0.0018   -0.0055   -0.0009    0.0088    0.0181   -0.0076    0.0094    0.0033    0.0087    0.0186    0.0002

  Columns 19 through 23

    0.0096   -0.0053   -0.0134    0.0127   -0.0144

disp('YoY Growth Rates:');

YoY Growth Rates:

disp(yoy_growth_rate);

    0.0052    0.0133    0.0403    0.0476    0.0510    0.0695    0.0668    0.0611    0.0576    0.0497    0.0633    0.0401