absolute return definition
DEFINITION of 'Absolute Return'. The return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a percentage) that an asset-usually a stock or a mutual fund-achieves over a given period of time. Absolute return measures the actual percentage return of an asset over a specific period of time. Absolute return also refers to an investment strategy that attempts to achieve positive performance under varying market conditions by engaging in long and short positions. DEFINITION of 'Absolute Return Index'. A stock index designed to measure absolute returns. The absolute return index is actually a composite index made up of five other indexes. This index is used to compare the absolute returns posted by the hedge fund market as a whole against individual hedge funds. Definition of absolute return. The term absolute in a mathematical sense refers to the numerical value of a number without its sign. For example, the absolute value of -7 is 7. Absolute return in the financial context has a similar connotation. Rate this absolute return definition... Absolute return measures the actual percentage return of an asset over a specific period of time. Absolute return also refers to an investment strategy that attempts to achieve positive performance under varying market conditions by engaging in long and short positions. The return on an asset, fund, or other investment expressed in dollar or percentage terms. That is, the absolute return is the return relative to the investment itself. For example, if one buys shares in a stock for $1000 and sells them for $1500, one may say that one has an absolute return of $500 or 50%. Definition of absolute return. The term absolute in a mathematical sense refers to the numerical value of a number without its sign. For example, the absolute value of -7 is 7. Absolute return differs from relative return because it is concerned with the return of a particular asset and does not compare it to any other measure or benchmark. A stock index designed to measure absolute returns. The absolute return index is actually a composite index made up of five other indexes. This index is used to compare the absolute returns posted by the hedge fund market as a whole against individual hedge funds. That is, the absolute return is the return relative to the investment itself. For example, if one buys shares in a stock for $1000 and sells them for $1500, one may say that one has an absolute return of $500 or 50%. There is little analysis of the absolute return beyond that.
The return that an asset achieves over a certain period of time.