Can anyone help me with a method that calculates the IRR of a series of stock trades?
Let's say the scenario is:
$10,000 of stock #1 purchased 1/1 and sold 1/7 for $11,000 (+10%)
$20,000 of stock #2 purchased 1/1 and sold 1/20 for $21,000 (+5%)
$15,000 of stock #3 purchased on 1/5 and sold 1/18 for $14,000 (-6.7%)
I finally found exactly what I was looking for: http://rubydoc.info/gems/finance/1.1.0/Finance/Cashflow
gem install finance
To solve the scenario I posted originally:
include Finance trans =  trans << Transaction.new( -10000, date: Time.new(2012,1,1) ) trans << Transaction.new( 11000, date: Time.new(2012,1,7) ) trans << Transaction.new( -20000, date: Time.new(2012,1,1) ) trans << Transaction.new( 21000, date: Time.new(2012,1,20) ) trans << Transaction.new( -15000, date: Time.new(2012,1,5) ) trans << Transaction.new( 14000, date: Time.new(2012,1,18) ) trans.xirr.apr.to_f.round(2)
I also found this simple method: https://gist.github.com/1364990
However, it gave me some trouble. I tried a half dozen different test cases and one of them would raise an exception that I was never able to debug. But the xirr() method in this Finance gem worked for every test case I could throw at it.