I use Performance Analytics package in R to compare annualized and cumulative return of a portfolio. My expectation is that both should be equal over a period of 1-year but results tell me I'm wrong.
It is not clear for me how annualized return could be 122.55 from 2014-01-01 to 2014-12-31 while the cumulative return is 205.71 over the same period. Geometric is set to its default value (
TRUE) and I think number of period in a year is set by default to 252 (daily scale).
statistic <- rbind(Return.annualized(bench)*100, Return.cumulative(bench)*100)
To know better what is the return I can expect from this portfolio could somebody please explain to me why both returns are not equal ?