Calculator Panel
Calculation Ready
Enter your values above and click Calculate.
What This Calculator Does
This calculator calculates the weighted aggregate performance return of multiple assets based on their portfolio size.
How to Use This Calculator
Input the dollar values and percentage returns for up to three asset holdings. Click Calculate to view weighted portfolio return.
How the Calculation Works
The underlying math engine processes your inputs using exact formulas. This systematic approach ensures professional, institutional-grade calculation precision:
Mathematical Formula
Formula Legend:
- · Value1, Value2, Value3 = Dollar values of individual assets.
- · Return1, Return2, Return3 = Individual percentage returns for those assets.
Practical Example
Suppose your portfolio contains $80,000 of Asset A (returned 10%) and $20,000 of Asset B (returned 5%):
Step-by-Step Mathematical Walkthrough:
- 1 First, find total portfolio value: $80,000 + $20,000 = $100,000.
- 2 Calculate weighted return contributions: ($80,000 * 10) + ($20,000 * 5) = 800,000 + 100,000 = 900,000.
- 3 Divide by total value: 900,000 / $100,000 = 9.00%.
- 4 The overall weighted portfolio return is exactly 9.00%.
Important Assumptions & Notes
- Input percentages represent return rates over the same time period.
Common Mistakes or Considerations
- Calculating a simple average of return rates, which overemphasizes the impact of small holdings.
Frequently Asked Questions
What is weighted return?
Weighted return calculates the total return of a portfolio by accounting for the relative size (weight) of each asset position, rather than taking a simple average.
Why can't I just use the simple average of stock returns?
A simple average treats a $100 stock holding and a $10,000 stock holding equally. Weighted return scales returns accurately based on the actual capital allocated to each.
How does the size of an asset position affect weighted return?
Larger positions have a much bigger impact on your portfolio's weighted return. A 50% gain on a tiny 1% position has less effect than a 2% gain on a large 30% position.
How do I calculate the weighted return of a three-asset portfolio?
Multiply each asset's return by its percentage weight in the portfolio, and sum the three results together.
Does weighted return account for cash holdings?
Yes. Cash is an asset class with a return rate (often 0% to 5%). Including cash and its weight provides an accurate picture of total portfolio return.