Holding period return vs. continuous compouding

[keep_running]

Is the holding period return the same thing as the return for a period with continuous compounding?

 

[S2000magician]

That’s a tough question to answer as posed.
Suppose that your purchase price is $10, your selling price is $11, and you receive a $0.50 dividend the day you sell. Your holding period return is 15% (= ($11 − $10 + $0.50) / $10), which is equivalent to a continuously compounded return of 13.9762%. So in that sense, the answer is yes.
However, if your question meant is the holding period return (15%) equal to a continuously compounded return of 15%, then the answer is no.

 

[keep_running]

Is there a formula to convert HPY to continuous compounding returns?
I am confused by what you explained above…

 

[S2000magician]

First you would convert from HPY to effective annual yield (EAY):
EAY = (1 + HPY)^(365/t) − 1
where t is the number of days in the holding period.
Then you convert from EAY to continuous compounding:
rcont = ln(1 + EAY)