physics

Relative strength

Relative strength is a physics topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Relative strength rather than just read about it. In short: Relative strength is a ratio of a stock price performance to a market average (index) performance. It is used in technical analysis.

Key takeaways

Relative strength belongs to physics; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Relative strength to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Relative strength from memory before moving on to harder problems.

Reference excerpt

Relative strength is a ratio of a stock price performance to a market average (index) performance. 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.

Relative Rotation Graph 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.

Comparison with the relative strength index 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. 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.

References

Worked examples

Example 1 — a first encounter with Relative strength

Start with the simplest possible case. Write down what Relative strength claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In physics, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Relative strength before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Relative strength ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Relative strength

In research: Relative strength appears in physics research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Relative strength in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Relative strength is common in secondary-school and first-year university syllabi. It links to neighbouring topics Finance stubs, Technical analysis, so understanding it makes those chapters shorter.
In everyday life: Look for Relative strength outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Relative strength in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Relative strength means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Relative strength out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Relative strength in simple terms?

Relative strength is a ratio of a stock price performance to a market average (index) performance. It is used in technical analysis.

Why does Relative strength matter?

Because it connects several physics ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Relative strength?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Relative strength.