Sign up to join this community. The best answers are voted up and rise to the top. Stack Overflow for Teams — Collaborate and share knowledge with a private group. Create a free Team What is Teams? Learn more. How does Yahoo finance adjust stock data for splits and dividends? Ask Question. Asked 6 years, 9 months ago. Active 3 years, 4 months ago. Viewed 33k times. So what adjustment are they talking of? Improve this question.
See commit efb. It looks like Yahoo Finance is now returning the raw dividend data, unadjusted for subsequent stock splits, and quantmod may need to be adjusted in order to reflect Yahoo Finance's current approach to reporting unadjusted pre-split dividends. These data confirm that Yahoo Finance is not reporting CF's pre-split dividends on a split-adjusted basis. Although Yahoo Finance is not reporting CF's pre-split dividend data on a split-adjusted basis, as shown in the example above, it is reporting CF's pre-split OHLC data on a split-adjusted basis.
This can be seen by applying getSymbols "CF" , which shows that Yahoo Finance is reporting the following closing prices for CF on the three trading days centered around CF's stock split effective :.
These data confirm that Yahoo Finance is reporting CF's pre-split OHLC prices on a split-adjusted basis, which is inconsistent with its reporting of CF's pre-split dividends without adjusting for the split as shown above. Although I calculate my own adjusted closing prices using Tiingo data and TTR::adjRatios , and do not rely on Yahoo Finance's reported adjusted closing prices, I notice -- when I compare x my own calculated pre-split adjusted closing prices as well as the pre-split adjusted closing prices reported by CapitalIQ and Bloomberg with y the pre-split adjusted closing prices reported by Yahoo Finance -- that the Yahoo Finance pre-split adjusted closing prices are materially different.
Essentially, Yahoo appears to be mixing apples and oranges, using pre-split dividends that have not been adjusted for the split and therefore loom 5X larger to modify pre-split closing prices that have been adjusted for the split. Secondly, the adjusted closing price allows investors to compare the performance of two or more assets. Aside from the clear issues with stock splits, failing to account for dividends tends to understate the profitability of value stocks and dividend growth stocks.
Using the adjusted closing price is also essential when comparing the returns of different asset classes over the long term. For example, the prices of high-yield bonds tend to fall in the long run. That does not mean these bonds are necessarily poor investments. Their high yields offset the losses and more, which can be seen by looking at the adjusted closing prices of high-yield bond funds. The adjusted closing price provides the most accurate record of returns for long-term investors looking to design asset allocations.
The nominal closing price of a stock or other asset can convey useful information. This information is destroyed by converting that price into an adjusted closing price. As a result, a sort of tug of war can take place between bulls and bears at these key prices. If the bulls win, a breakout may occur and send the asset price soaring.
Similarly, a win for the bears can lead to a breakdown and further losses. The adjusted close stock price obscures these events. By looking at the actual closing price at the time, investors can get a better idea of what was going on and understand contemporary accounts.
If investors look at historical records, they will find many examples of tremendous public interest in nominal levels. Perhaps the most famous is the role that Dow 1, played in the to secular bear market. The breakout finally took place in , and the Dow never dropped below 1, again. In general, adjusted closing prices are less useful for more speculative stocks. William J. O'Neil gave examples where stock splits, far from being irrelevant, marked the beginnings of real declines in the stock price.
Accessed Aug. Stock Trading. Investing Essentials. Your Privacy Rights. Sign up here. What is the adjusted close? Multipliers Split multipliers are determined by the split ratio.
For example: In a 2 for 1 split, the pre-split data is multiplied by 0. In a 4 for 1 split, the pre-split data is multiplied by 0.
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