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I have composed a mosaics of 3 images of Landsat 8 Surface Reflectance Level 2 for the bands NIR and RED. According to the Landsat Surface Reflectance Product Guide each band is supposed to be multiplied pixel wise times a scaling factor of 0.0001. As I have understood, it might occur that after such multiplication the obtained surface reflectance values may slightly surpass/exceed the commonly known upper and lower bound of the reflectance range going from 0 to 1. Then, I calculated NDVI and the values do not strictly go from -1 to 1 but from -0.5 to 0.98.

Could this have to do with the fact that the input surface reflectance bands (NIR and RED) slightly surpass the 0 to 1 values expected for reflectance?

Does NDVI always range from -1 to 1 or it can also range within the values -1 to 1?

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If you first multiply every layer by 0.0001 and then calculate NDVI the surpassing shouldn't happen, as you are dividing a subtraction of two positive numbers (band values) by the addition of the same two numbers; this is because it is a normalized index, which mathematically means that it will range from -1 to 1 in this case; as you state, your values range from -0.5 to 0.98, this lays withing the range; surpassing the range would be, e.g. -1.02 to 1.04

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