AI For Trading: Why Log Returns? (10)

Let's summarize what we just learned. These are some generally accepted reasons that quantitative analysts use log returns:
让我们总结一下我们刚学到的东西。这些是定量分析师使用日志返回的一些普遍接受的原因:

  • 1、Log returns can be interpreted as continuously compounded returns.
  • 2、Log returns are time-additive. The multi-period log return is simply the sum of single period log returns.
  • 3、The use of log returns prevents security prices from becoming negative in models of security returns.
  • 4、For many purposes, log returns of a security can be reasonably modeled as distributed according to a normal distribution.
  • 5、When returns and log returns are small (their absolute values are much less than 1), their values are approximately equal.
  • 6、Logarithms can help make an algorithm more numerically stable.

Stepping back, it may not be immediately obvious why all these attributes are benefits. Don't worry about this. As you progress in this course and beyond, you will see more applications of returns and log returns in trading strategies and algorithms and you'll be able to better appreciate why they are used.
退一步,为什么所有这些属性都是有益的可能并不是很明显。别担心这个。随着您在本课程中及以后的进步,您将在交易策略和算法中看到更多的回报和日志返回应用程序,您将能够更好地了解它们的使用原因。

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