How to Calculate Moving Average in Google Sheets

Google Sheets provides powerful tools for data analysis, and one common technique is calculating the moving average. In this guide, we’ll explore the concept of Simple Moving Average (SMA) and how to efficiently calculate it using Google Sheets. Additionally, we’ll delve into the use of the GOOGLEFINANCE function and the AVERAGE function for moving averages.

What is the Simple Moving Average (SMA)?

The Simple Moving Average (SMA) is a widely used statistical calculation that helps smooth out fluctuations in data over a specified period. It is particularly valuable in financial analysis, trend identification, and various time-series data applications.

The Google Sheets Moving Average and How to Calculate it

Calculating the moving average in Google Sheets involves creating a series of averages for subsets of the data, “moving” through the dataset. This process helps reveal trends and patterns while reducing noise caused by random fluctuations.

To calculate the moving average in Google Sheets:

  1. Organize Your Data:
    • Arrange your time-series data in a column, ensuring it’s organized chronologically.
  2. Choose the Moving Average Period:
    • Determine the period for your moving average (e.g., 10 days, 20 days).
  3. Use the AVERAGE Function:
    • Create a new column next to your data column.
    • In the first cell of the new column, use the AVERAGE function to calculate the average for the first set of data points (e.g., if your period is 10 days, average the first 10 data points).
  4. Drag the Formula Down:
    • Click on the small square at the bottom right corner of the cell containing the formula, and drag it down to apply the AVERAGE function to subsequent sets of data.
  5. Review the Moving Average:
    • The new column will now display the moving average for each corresponding set of data points.

The GOOGLEFINANCE Function

For those dealing with financial data, the GOOGLEFINANCE function in Google Sheets provides a convenient way to fetch historical stock prices and other financial metrics. By combining this function with moving averages, you can conduct comprehensive financial analysis directly in your spreadsheet.

The syntax for this function is as follows:

GOOGLEFINANCE(ticker, [attribute], [start_date], [end_date|num_days], [interval])

Here,

  • ticker is the symbol or initials corresponding to your required stock. This can consist of both the exchange symbol as well as the ticker symbol of the stock. For example, “NASDAQ:GOOG” represents “GOOG” stocks. You could also simply use the symbol “GOOG”.
  • attribute is the value that you want to access relating to the given ticker, for example, “price”,”high”,”low”, “volume”, etc. If you don’t specify this attribute, the function fetches the price relating to the given ticker.
  • start_date is the starting date from which you want the attribute retrieved
  • end_date is the ending date till which you want the attribute retrieved. num_days is the number of days for which you want the attribute retrieved. You can either specify an end_date or num_days value for this parameter.
  • interval specifies how frequently you want data returned. It can be either ‘daily’ or ‘weekly’.

So to fetch closing prices of the “GOOG” stocks, we use the GOOGLEFINANCE function as follows:

=GOOGLEFINANCE(“NASDAQ:GOOG”,”close”,DATE(2021,2,27),10)

The above function fetches the closing prices of NASDAQ:GOOG starting from 2/27/2021 and up to 10 days after that.

The AVERAGE Function

The AVERAGE function in Google Sheets is a fundamental tool for calculating the mean of a range of values. In the context of moving averages, it allows you to efficiently compute the average for different subsets of your dataset, revealing trends and patterns over time.

By mastering these functions and techniques, you can harness the full potential of Google Sheets for calculating moving averages, whether for financial analysis, trend identification, or other time-series data applications.

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