Relative Strength (Comparison)

Relative Strength (Comparison) Interpretation:

The relative strength compares the evolution of two securities. This indicator is used to represent the correlation between two securities or generally between a security and its sectorial index. When the relative performance is going up, it means that the first security is outperforming the second (named reference) and when the relative strength decreases, it means that the first security is underperforming the second.

Relative Strength (Comparison) Calculation:

This indicator represents the evolution of a security's price compared to another one (a stock and a market index) In order to study the relative strength of a stock compared to a market index we calculate the ratio. Ratio = price of the security/price of the index. Then, calculate the difference Diff = ratio(t)-ratio(t-1) and finally the percentage of variation.

Return from Relative Strength (Comparison) to Using Indicators

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