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I have a chart with prices of multiple stocks.
The problem is that some prices are below 100 while others are above 1000, so the chart is really ugly.
How do I compare historical in multiple stocks, so the chart is still readable. For instace, if I add Berkshire Hathaway, I won't be able to read anything off my chart because of the large gap between prices of different stocks.
I wonder if that's what the logarithmic scale is for?
Index all the stocks to 100 in the start of the period!That is mulitiply all stock prices with 100 and divide all stock prices with their price in the beginning of the time series!
Yes I would recommend you to plot the log of prices instead of prices. It will re-scale the data while preserving the hierarchy of prices, and more importantly it allows to compare easily the growth among several stocks because a vertical move of 0.01 corresponds to a 1% change of the price at any point in the figure (not matter the price level and the direction of the move).
See also this blog post and this SO question .
