Relative strength
Relative strength is a ratio of a stock price performance to a market average (index) performance.[1] It is used in technical analysis.
It is not to be confused with relative strength index.
To calculate the relative strength of a particular stock, divide the percentage change over some time period by the percentage change of a particular index over the same time period.[2]
Relative Rotation Graph
[edit]Relative Rotation Graphs (RRG) show the relative strength and momentum of mood swings in the market compared to benchmarks. The "JdK RS-Ratio" (relative strength, RS) was developed by Julius de Kempenaer, a sellside analyst in The Netherlands.[3][4][5][6]
Comparison with the relative strength index
[edit]Relative strength compares the performance of one security, sector, or market with another, usually by dividing the price of the first by the price of a benchmark or comparison asset. This produces a ratio line that rises when the first asset is outperforming the comparison asset and falls when it is underperforming.[7]
The relative strength index is a different technical indicator. It is a momentum oscillator that measures the speed and magnitude of recent price movements of a single security, rather than comparing that security directly with a benchmark. The two terms are therefore related in name but measure different concepts in technical analysis.[8]
References
[edit]- ^ [1] Investopedia | terms
- ^ [2] Relative Strength | AAII
- ^ [3] Investing Dynamic Environment | See page 4
- ^ [4] Relative Rotation Graphs | See pages 45, 46
- ^ [5] Relative Rotation Graphs | Optuma
- ^ [6] Relative Rotation Graphs | Stock Charts
- ^ "Price Relative / Relative Strength". StockCharts ChartSchool. Retrieved 28 June 2026.
- ^ "Relative Strength Index (RSI)". StockCharts ChartSchool. Retrieved 28 June 2026.
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