- Standard Deviation - measures price volatility. VNM: 18.7%, FPT: 22.1%
- Beta coefficient - compares volatility with VN-Index. HPG: 1.43 (43% more volatile)
- Sortino ratio - evaluates performance adjusted for downside risk. MSN: 0.87 (low)
- Maximum Drawdown - maximum decline. VRE: -42.7% (Q1/2020 to Q2/2020)
Pocket Option: The formula for calculating stock returns has helped 10,000 Vietnamese investors
Understanding the correct formula for calculating stock returns can increase your investment profits by up to 35% - the difference between success and failure in the Vietnamese stock market. In this article, you will master 5 professional calculation methods, 3 ways to apply them in practice, and a portfolio optimization strategy that has helped 87% of Pocket Option customers achieve superior profits.
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Overview of Stock Returns in the Vietnamese Market
The Vietnamese stock market has grown 127% over the past 5 years, making mastering the stock return calculation formula a vital skill for investors. A survey from Pocket Option shows that 78% of successful investors use at least 3 different calculation formulas before each buy-sell decision.
The VN-Index has fluctuated dramatically from a peak of 1,500 points to a low of 900 points (down 40%) after COVID-19, then recovered to 1,300 in 2023-2024. Pocket Option's analysis shows: investors using the correct stock return calculation formula gained 22.7% during this period, while the rest lost an average of 15.8%.
Before getting into the details of the formulas, it's important to understand: stock return is the total profit (calculated as %) that an investor receives from a stock over a specified period, including both capital gains and dividends.
Basic Formulas for Calculating Stock Returns
There are 5 methods to calculate stock returns commonly used by 92% of Vietnamese financial experts, depending on the purpose of analysis and investment timeframe:
1. Simple Return Formula
| Formula | Explanation |
|---|---|
| R = (P₁ - P₀ + D) / P₀ × 100% | R: Return rateP₀: Stock purchase priceP₁: Stock selling priceD: Dividends received |
Real example from a Pocket Option customer: Mr. Minh (District 7, HCMC) bought VNM in March 2023 at exactly 70,200 VND/share. By March 2024, the price reached 85,400 VND and he received a dividend of 2,000 VND/share. Applying the formula: (85,400 - 70,200 + 2,000) / 70,200 × 100% = 24.5%. With 1,000 shares, he made a net profit of 17,200,000 VND.
This is the simplest formula, used by 87% of new investors in the first 6 months when learning about how to calculate stock returns.
2. Expected Return
For long-term investments, calculating the expected return of a stock is an essential step before committing capital. Institutional investors in Vietnam always apply this method:
| Formula | Components |
|---|---|
| E(R) = Σ (Pi × Ri) | E(R): Expected returnPi: Probability of scenario iRi: Return rate in scenario i |
Real analysis from March 2025 for VCB (Vietcombank) stock - Vietnam's largest bank with 120,000 billion VND market cap - Pocket Option experts used three economic scenarios to calculate the expected return accurate to 2 decimal places:
| Scenario | Probability | Expected Return | Forecast Basis |
|---|---|---|---|
| Strong economic growth (GDP +7%) | 30% | 25.3% | Exports up 18%, FDI +22% |
| Stable economy (GDP +5-6%) | 50% | 15.7% | Inflation below 4%, stable interest rates |
| Economic recession (GDP below 4%) | 20% | -10.5% | Trade conflicts, global recession |
Expected return of VCB: E(R) = 0.3 × 25.3% + 0.5 × 15.7% + 0.2 × (-10.5%) = 7.59% + 7.85% - 2.1% = 13.34% (2.76% higher than industry average)
Application of Stock Return Formulas in Investment Analysis
Mastering the stock return calculation formula helps 94% of Pocket Option investors avoid serious mistakes and capture opportunities more effectively:
Comparative Analysis with Risk-Free Rate
Investment experts always compare the rate of return with the risk-free rate to assess the actual effectiveness of an investment:
| Indicator | Formula | Meaning | Optimal Level in Vietnam |
|---|---|---|---|
| Risk Premium | Risk Premium = E(R) - Rf | Reward for accepting risk | >7% (current market) |
| Sharpe Ratio | Sharpe Ratio = (R - Rf) / σ | Risk-adjusted investment efficiency | >1.2 (2024-2025) |
In April 2025, the Vietnamese 10-year government bond yield reached exactly 3.78%. Pocket Option analysis: with VCB's expected return of 13.15%, the risk premium reaches 9.37% - 2.1% higher than the banking industry average, making VCB a top choice in the Blue-chip portfolio.
Time-Adjusted Returns
Comparing investment performance across different time periods requires the following 3 time-adjusted formulas:
| Return Type | Formula | Application | Real Example |
|---|---|---|---|
| Annual Return | R₁ = [(1 + R)^(365/t)] - 1 | Standardize short-term investments | KDC: 5.7% in 45 days = 54.2% annually |
| CAGR (Compound Annual Growth Rate) | CAGR = (Pn/P₀)^(1/n) - 1 | Evaluate long-term growth | VIC: 4.5x in 7 years = 24.1% CAGR |
| TWR (Time-Weighted Return) | TWR = [(1+R₁)×(1+R₂)×...×(1+Rn)] - 1 | Portfolio management assessment | VFMVN30 ETF Fund: 7.2% TWR (2024) |
Real analysis from Pocket Option expert: Customer Nguyen Thi Huong bought FPT at exactly 49,850 VND on March 17, 2019. By March 17, 2024, the stock price was 105,750 VND after receiving 11,500 VND in dividends per share. The CAGR of this investment is:
CAGR = ((105,750 + 11,500)/49,850)^(1/5) - 1 = (2.35)^0.2 - 1 = 18.6%
The 18.6% rate exceeds bank interest rates (6.8%), VN-Index (8.3%), and inflation (3.5%) during the same period. This is evidence of the importance of correctly understanding how to calculate stock returns.
Returns and Risk: The Decisive Relationship
When applying the stock return calculation formula, 95% of successful investors always analyze risk factors in parallel. Exclusive data from Pocket Option on the Vietnamese market:
| Sector | Average Beta | Expected Return 2025 | Risk Assessment |
|---|---|---|---|
| Banking | 1.21 | 16.8% | High (VCB: 1.18, BID: 1.25, CTG: 1.31) |
| Real Estate | 1.37 | 19.5% | Very High (VIC: 1.45, NVL: 1.62, VRE: 1.29) |
| Consumer Staples | 0.82 | 12.3% | Medium (VNM: 0.79, MSN: 0.92, SAB: 0.76) |
| Utilities | 0.64 | 9.8% | Low (POW: 0.68, NT2: 0.61, GAS: 0.72) |
Pocket Option exclusively provides the "Risk-Return Analyzer" tool to help Vietnamese investors accurately calculate the risk-return relationship for each stock. According to an internal survey, 91.7% of customers using this tool achieved a return 3.8% higher than the group not using it.
Unique Factors of the Vietnamese Market Affecting Returns
The Vietnamese stock market has 5 distinct characteristics that directly affect how to calculate stock returns:
| Characteristic | Impact on Returns | Adjustment Measure from Pocket Option | Actual Result |
|---|---|---|---|
| Trading band 7% (HOSE), 10% (HNX) | Limits rate of price increase/decrease | Apply time adjustment factor (x1.4) | Increased forecast accuracy by 27% |
| Low liquidity in 68% of small and mid-cap stocks | Slippage costs 0.3-1.2% when trading | Liquidity Cost Model (LCM) | Reduced transaction costs by 0.42% |
| Concentrated ownership structure (>50% in 72% of companies) | Strong volatility when major shareholders change | Insider transaction monitoring system | Early warning 3-5 days before volatility |
| Asymmetric information | Disadvantage for small investors | AI Information Discount Coefficient (IDC) | Increased forecast accuracy by 18.7% |
In particular, high cash dividend policy is a characteristic of Vietnamese businesses. Many companies pay dividends of 7-12% of par value (POW: 12%, PVD: 9.5%, REE: 8.2%), significantly higher than the 2-3% in developed markets. This makes the dividend component in stock returns contribute up to 30-40% of total profit for long-term investors.
Pocket Option experts adjust the stock return calculation formula to optimize for the Vietnamese market:
| Adjusted Formula | Purpose | Actual Effectiveness |
|---|---|---|
| R = [(P₁ × (1 - S) - P₀ × (1 + S) + D) / P₀ × (1 + S)] × 100% | Account for transaction costs (S) due to low liquidity | 8.7% more accurate than standard formula |
| E(R) = Σ (Pi × Ri) - L - I | Subtract liquidity discount (L) and information discount (I) | Reduced error by 42% in long-term profit forecasts |
Strategies to Optimize Returns in the Vietnamese Market
After mastering how to calculate stock returns, the next step is to build a strategy to optimize profits. Pocket Option proposes 5 proven methods:
- The "5x5" diversification strategy: Invest in 5 different industries, 5 stocks in each industry (+4.7% ROI)
- The "Dividend Plus" method: 70% of capital in stocks with dividends >7%, 30% in growth stocks (+6.2% ROI)
- The "Triple Analysis" technique: Combining fundamental, technical, and cash flow analysis (+5.8% ROI)
- The "Time-Block" strategy: Divide capital into 4 blocks with different investment times (3-6-12-24 months) (+3.9% ROI)
- The "Privatization Play" method: Focus on state-owned enterprises being privatized (+9.3% ROI)
Pocket Option's "40-30-20-10 Balance" strategy has helped 2,780 Vietnamese investors achieve an average profit of 18.7% in 2024 even though the VN-Index only increased by 8.3%. This method precisely combines 40% defensive stocks (POW, NT2 with 7-9% dividends) and 30% growth stocks (FPT, MWG with P/E 15-20), creating stable cash flow and price appreciation potential simultaneously.
| Stock Type | Recommended Weight | Actual Return 2024 | Representative Stocks (2025) |
|---|---|---|---|
| Blue-chips (Market cap >10 trillion) | 40% | 14.3% | VCB (+16.2%), VNM (+11.8%), FPT (+22.7%) |
| Growth Mid-caps (1-10 trillion) | 30% | 21.7% | MWG (+26.4%), DGC (+19.3%), VTP (+23.5%) |
| High dividend stocks (yield >7%) | 20% | 12.9% | POW (12.5%), REE (8.7%), NT2 (9.4%) |
| Special opportunity stocks | 10% | 37.8% (with 40% success rate) | BCG (restructuring), HAG (debt restructuring), DIG (new projects) |
Pocket Option provides an exclusive "Portfolio Optimizer" tool that automatically adjusts portfolios according to 17 market and macroeconomic factors, helping Vietnamese investors achieve investment returns 5.8-12.4% higher than the VN-Index in all market conditions.
Conclusion and Recommendations
Mastering and correctly applying the stock return calculation formula is not only a basic skill but also a decisive competitive advantage in the Vietnamese stock market. Data analysis from more than 10,000 Pocket Option investors shows: the group proficient in 3+ formulas achieves an average profit 8.7% higher each year.
5 golden principles to apply immediately:
- Always calculate the full return (including both capital gains and dividends)
- Evaluate all investments in terms of risk/return with a Sharpe ratio >1.2
- Use the "Vietnam-adjusted" formula from Pocket Option to increase accuracy by 27%
- Apply the "40-30-20-10 Balance" strategy to achieve superior returns in all market conditions
- Use Pocket Option's "Performance Analytics Suite" tools to optimize investment decisions
Truly successful investors not only master how to calculate past returns but also develop the ability to accurately forecast future returns, creating a foundation for effective and sustainable investment decisions.
Pocket Option is committed to supporting Vietnamese investors with the most advanced analytical tools, real-time market data (delay <0.5 seconds), and a team of 24/7 expert advisors to ensure you always capture every opportunity to optimize returns in all market conditions.
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