ghostfolio/libs/common/src/lib/calculation-helper.spec.ts

import { Big } from 'big.js';

import { getAnnualizedPerformancePercent } from './calculation-helper';

describe('CalculationHelper', () => {
  describe('annualized performance percentage', () => {
    it('Get annualized performance', async () => {
      expect(
        getAnnualizedPerformancePercent({
          daysInMarket: NaN, // differenceInDays of date-fns returns NaN for the same day
          netPerformancePercentage: new Big(0)
        }).toNumber()
      ).toEqual(0);

      expect(
        getAnnualizedPerformancePercent({
          daysInMarket: 0,
          netPerformancePercentage: new Big(0)
        }).toNumber()
      ).toEqual(0);

      /**
       * Source: https://www.readyratios.com/reference/analysis/annualized_rate.html
       */
      expect(
        getAnnualizedPerformancePercent({
          daysInMarket: 65, // < 1 year
          netPerformancePercentage: new Big(0.1025)
        }).toNumber()
      ).toBeCloseTo(0.729705);

      expect(
        getAnnualizedPerformancePercent({
          daysInMarket: 365, // 1 year
          netPerformancePercentage: new Big(0.05)
        }).toNumber()
      ).toBeCloseTo(0.05);

      /**
       * Source: https://www.investopedia.com/terms/a/annualized-total-return.asp#annualized-return-formula-and-calculation
       */
      expect(
        getAnnualizedPerformancePercent({
          daysInMarket: 575, // > 1 year
          netPerformancePercentage: new Big(0.2374)
        }).toNumber()
      ).toBeCloseTo(0.145);
    });
  });
});