Glossary / Relative performance

Relative strength

Also called: RS · relative performance

Relative strength is a difference, not a standalone reading: a security's price change over a period, minus a benchmark's price change over exactly the same period. It answers whether a security moved by more or less than the market it trades in.

How it is measured

Take the security's percentage change over a chosen horizon. Take the benchmark's percentage change over that identical horizon. Subtract the second from the first. Running the calculation across several horizons — a quarter, half a year, a year — and combining them keeps a single noisy quarter from dominating the result.

Why it matters

Because it is a difference between two numbers that can both be negative, the reading separates a security's own behaviour from the market's. A security can read well above the midpoint over a period in which its price fell, because the benchmark fell further. For a swing trader that distinction is the point: it identifies which securities are moving on something specific to them rather than on the whole market moving together.

In Market Census

Strength vs the market is one of the checks in the Market Census score. It compares a stock's price move with the whole market's.

See this in the product

How Market Census scores stocks

Related terms

Alpha

Alpha is how much better or worse something did than the market over the same stretch of time.

Beta

Beta measures how much a security's price has historically moved for a given move in its benchmark.

RSI

RSI is an oscillator that compares the average size of a security's up sessions to the average size of its down sessions over a recent window, expressed on a 0-100 scale.

Sector rotation

Sector rotation describes a shift in which parts of the market are moving most, as capital concentrates in some sectors and thins out of others over weeks or months.

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General information about market vocabulary, written to be descriptive rather than prescriptive. Not investment advice — see the risk disclosure.