Definitions
In plain terms
Log returns add across consecutive periods, which is useful in statistical work, but they are not the same numerical quantity as simple returns.
Technical
For positive comparable values, log return is ln of ending value divided by starting value; converting back requires exponentiation.
Scope
It is undefined for non-positive values and should not be presented as an ordinary percentage change without conversion.
Formula
g = ln(V1 / V0)g=\ln(V_1/V_0)| Symbol | Meaning | Unit |
|---|---|---|
V0 | starting positive comparable value | value unit |
V1 | ending positive comparable value | value unit |
Output unit: log return
Examples
- A governed calculation records log return with its exact basis, effective time, source, and units.
Common misconceptions
- Log Return does not have one universal treatment without the applicable methodology, event terms, and data context.
Concept relationships
Prerequisites
Contrasts with
Where this concept is used
Evidence and governance
- Fintech Builder Glossary Definition Contract The Fintech Builder · internal governed contract
Supports: preferred label, short definition, technical definition, formula
Limits: Defines governed platform behavior rather than claiming these policies are universally prescribed by external McClellan methodology.
- Reviewed by
- fintech-builder-owner-approved
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- published