Your USD Return Alone Can't Tell You If It Was the Stock or the Currency
When you invest in a foreign stock, looking only at your return in USD can be misleading about how the stock itself actually performed. If you sell while the foreign currency has strengthened, your USD return can look great even if the stock barely moved โ and the reverse is also true. This calculator takes your buy and sell prices and FX rates separately, then isolates the stock's real return from the currency effect.
It works by calculating your total USD return and the stock's own return (in its local currency) separately, then treating the gap between them as the FX contribution. Total USD return = (sell price ร sell FX rate โ buy price ร buy FX rate) รท (buy price ร buy FX rate); the stock's real return = (sell price โ buy price) รท buy price. The difference between the two is roughly how much currency movement contributed.
Breaking it down this way tells you whether your gain came from picking a good stock or from a currency tailwind. This tool is a simplified comparison and doesn't factor in taxes or brokerage fees, so check your actual brokerage statement for your true after-tax, after-fee return.
Frequently Asked Questions
The same USD return could come mostly from the stock rising, or mostly from currency movement, and that changes how you should think about the trade going forward. Currency is hard to predict, so it helps to isolate how the stock itself actually performed.
Not necessarily. You could see a currency loss in USD terms while the stock's own price gain is large enough to keep your total return positive. You need to look at both factors together to get the full picture.
It's an approximation โ the total USD return minus the stock's own return. Since the two factors actually interact multiplicatively, this is a reference figure rather than an exact contribution breakdown.