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I would like to allocate an expected yearly return based on the monthly outcomes of last year. However, these monthly outcomes can be both positive and negative.

For example (year 3 in the image), the yearly return of last year was 15000, and the monthly outcomes were -40000 in January, and 5000 from February through December. If the now expected yearly return is -2000 and I want to retain the same "proportionality", is there a way to calculate the expected monthly outcomes?

Edit: I have added an image that exemplifies "proportional" allocation. These are currently made using a somewhat ugly algorithm I devised after the initial post, so if there is a straightforward way or praxis for how to do this I am still interested. There are also choices made in the algorithm, beacuse I have a feeling that there are initial conditions for which there are multiple or even no solutions.

Example allocations

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  • $\begingroup$ Why are your trying to "allocate" an expected yearly return? What do you mean by "proportionality"? $\endgroup$
    – smcc
    Dec 1, 2022 at 20:19
  • $\begingroup$ @smcc I added an image where I attempt to visualize what I mean by "proportionality". $\endgroup$
    – Lars Rönnbäck
    Dec 12, 2022 at 13:08

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