Absolute & annualised (CAGR) return on your investment
Absolute return is simply the gain divided by what you invested. It ignores time, so a 50 percent gain over one year and over ten years look the same. Annualised return (CAGR) spreads the growth evenly across the holding period, which makes investments of different durations comparable. It suits a one-time lump-sum investment; for SIPs, XIRR is the more accurate measure.
Use annualised return (CAGR) for periods over one year, since absolute return hides how long the money took to grow.
SIP instalments are invested on different dates, so each one is held for a different time. XIRR accounts for that; this lump-sum calculation does not.
No. It measures gross growth of your investment value only.