Technical Analysis › Relative Strength

Relative Strength

Relative strength compares one instrument's performance against a benchmark, showing which is outperforming regardless of whether either is rising. It is a different measurement from the Relative Strength Index, which compares an instrument only against its own recent history, the shared name causes more confusion than any other naming collision in technical analysis.

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Direct Answer

Relative strength compares one instrument's performance against a benchmark, showing which is outperforming regardless of whether either is rising. It is a different measurement from the Relative Strength Index, which compares an instrument only against its own recent history. A stock can be strongly outperforming its index while its RSI is falling, so despite the shared name the two answer unrelated questions.

Is relative strength the same as RSI?

No. Relative strength is a comparison between two instruments, a ratio. RSI is a bounded momentum oscillator computed from a single instrument's own gains and losses. A stock can be strongly outperforming its index while its RSI is falling; the two answer unrelated questions.

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