Relative strength - A stocks price movement over the past year as compared to a market index (like the S&P 500). Value below 1.0 means the stock shows relative weakness in price movement (underperformed the market); a value above 1.0 means the stock shows relative strength over the 1-year period. Equation for Relative Strength: [current stock price/year-ago stock price] divided by [current S&P 500/year-ago S&P 500]. Note this is a potentially misleading indicator of performance because it does not take risk into account.
Relative strength compares the percentage gain in the price of a share to the percentage gain of a chosen index over the same period.An index is simply a weighted measure of a basket of shares. So if you were looking at the relative strength of Boots plc, you could compare its performance to:FTSE All-Share Index (the index for the whole London market)FTSE 100 (the index of the largest 100 companies on the London market by market capitalisation)FTSE Actuaries Industry sector index (this might look only at retailers, for instance)If a company"s share price rises in any period by more than the comparative index, it is said to have positive relative strength. If it falls by more than the index falls, it has negative relative strength. Of course, just because a company has positive relative strength in one period or against one index, does not mean it will have positive relative strength over a future period or against a different index.
Relative strength : a stocks price movement over the past year as compared to a market index (like the s&p 500). value below 1.0 means the stock shows relative weakness in price movement (underperformed the market); a value above 1.0 means the stock shows relative strength over the 1-year period. equation for relative strength: [current stock price/year-ago stock price] divided by [current s&p 500/year-ago s&p 500]. note this is a potentially misleading indicator of performance because it does not take risk into account.
relative strength compares the percentage gain in the price of a share to the percentage gain of a chosen index over the same period.an index is simply a weighted measure of a basket of shares. so if you were looking at the relative strength of boots plc, you could compare its performance to:ftse all-share index (the index for the whole london market)ftse 100 (the index of the largest 100 companies on the london market by market capitalisation)ftse actuaries industry sector index (this might look only at retailers, for instance)if a company"s share price rises in any period by more than the comparative index, it is said to have positive relative strength. if it falls by more than the index falls, it has negative relative strength. of course, just because a company has positive relative strength in one period or against one index, does not mean it will have positive relative strength over a future period or against a different index.
Relative strength