Stock market related, but I suppose it could relate to almost anything.

American Widget stock (AW) was trading last Monday at $100. On Tuesday it closed at $101 (a one dollar and one percent increase). On Wednesday it closed at $102 (a one dollar increase, but less than a percent). On Thursday it closed at $103 (a one dollar increase, but less than Tuesday’s percentage). The stock charts I know show the price increase or decline (and most of the time that’s fine), but what type of chart would show the percentage change? To me, the change in the price of a share is less important than seeing the change in percentage. For instance, in my example above (using traditional charts) one would think that the stock was climbing consistently up, whereas the percentage would show that the climb was slowing.

You’re thinking of an exponential or logarithmic scale. Technically, that has nothing to do with the type of graph. It’ll still be a bar chart, or a line graph.

My gut feeling is that a log or exponential graph would do this. Plot the log of the stock value over time? I’m no statistician, though. What you’re trying to display is the first derivative of the function of stock price over time. If the stock price grows over time with varying rates of change, the graph is a curve that is sometimes steep and sometimes flat. The graph of its first derivative goes up when the price is “accelerating” and is flat when the price is growing at a steady rate.

Thanks folks. While hardly a seasoned investor, I have run across the log scale graphs before. In those cases, the graph is still tied to a stock price (which is admittedly what most people are interested in). The log scale helps to “damp down” the changes, but ultimately still shows the same information as a non log scale chart.

What I am asking about may not exist, or may not have any practical value, but I was curious if there was a graph that only expressed the percentage change from the previous value, and was not tied to any absolute value such as price. So, the chart would rise to value +1 if the stock rose 1%, and (in another hypothetical example different than the one I gave above) would then drop to -2 if the stock fell 2% the following day.

One caveat: If the stock goes up 1% one day, and then down 1% the next, and continues alternating like that, your graph would show a slightly zig-zaggy line that would stay basically constant, but the stock would on average actually be dropping in price (exponentially decaying, in fact).

Well, yes, of course it shows the same information. That’s all the information that exists to be shown. All you can do with any other method is to throw away some information.

It sounds like what you want is a graph that shows the derivative (the rate of change) of the logarithm of the stock price. I’m not sure that this type of graph has any particular name, but at least you can describe it.

If you are wanting to track the daily percent price changes (as opposed to the cumulative impact of these changes on the stock price), a bar (or column) chart would be better than a line chart. Each day would be one bar, and its height would represent the percent change (positive percents would have bars going above the axis, and negative percents would have bars going below the axis).

Agreed. In a very general sense, stock market charts display “velocity”, whereas I am curious about “acceleration and deceleration”.

Point taken.

Well (if we want to split hairs), it *isn’t *the only information that exists; it is the only information that is displayed. But I think that you know what I meant…

I hadn’t thought of that, but I agree. A line chart would imply continuity, whereas a bar/column chart reflects the singular changes from day to day.

I didn’t know if something like this was available from financial sites, but it would seem that if I want this I’ll have to get the raw data and import it into a spreadsheet.

You can download historical data from Yahoo! Finance (for free). Import it into Excel and calculate the daily % price change based on the Adjusted Closing Price. For example, if Monday’s close is $100, and Tuesday’s close is $102, then the % change would be +2%.

One tip - use the Adjusted closing price. This accounts for stock splits, etc. and will give you a “smooth” price series. Unadjusted closing prices will jump when there is a stock split, etc. (E.g., a 2-for-1 stock split will result in a 50% decrease in stock price, which is not an accurate reflection of shareholders’ wealth as they now hold twice as many shares.)