Interpreting histograms of stock returnsīelow you can see the histograms of monthly returns for Microsoft (Figure 1) and Kellogg (Figure 2) for the period between Januand January 1, 2020. It’s often a good idea to check the “Chart Output” option (again you don’t have to) so that Excel automatically produces the histogram chart. For example, if you generated a bin from -10% to -5%, the histogram would give you the number of return observations that fall within that range in the sample. You can (but don’t have to) specify your own bins (the “Bin Range”) for the histogram. You’ll then have to specify the “Input Range”, which are the cells in which the stock returns are stored. Once you click on the Data Analysis box, choose the “Histogram” tool. Otherwise, the Data Analysis box would not appear under the Data tab. Note that if you haven’t used Data Analysis before, you need to make sure that the “Analysis ToolPak”, which is an Excel add-in, is enabled. To plot a histogram in Excel, you need to go to the “Data” tab and then click on the “Data Analysis” box. We will be working with monthly returns of two US stocks: Microsoft (MSFT) and Kellogg (K).

Creating histograms with other statistical software Using Excel’s “data analysis” tool to plot a histogram.

Interpreting histograms of stock returns.

Moreover, we will explain how to interpret a histogram of stock returns.

In this tutorial, we will show how to create a histogram using Excel. An easy way to visualize the distribution of stock returns is to plot a histogram.

Excel make histogram