What Is Relative Strength (RS) vs the Benchmark and How Is It Ranked?
Roughly one month of price change minus the benchmark's change over the same window (in pp). Positive means it outpaced the index, negative means it lagged.
Relative Strength (RS) is how much a stock has outperformed or underperformed its market benchmark over roughly the past month, measured in percentage points. RS of +4.0pp means the stock rose 4 points more than the index did (or fell 4 points less); -4.0pp means it lagged by that much.
How it is calculated
- Stock return = (today's close minus the close 20 trading days ago) divided by that earlier close, times 100.
- Benchmark return = the same calculation for the market's benchmark index over the same 20 days.
- RS = stock return minus benchmark return, in percentage points.
Stock Compass picks the benchmark by market: the Hang Seng Index for Hong Kong stocks, the CSI 300 for A-shares, and the S&P 500 for US stocks. It then ranks every stock in your watchlist for that market from highest RS to lowest, so each card shows both the number and its rank — for example "RS +3.2pp · #4/17". Stocks without 20 days of history are left out of the ranking. Because it is a subtraction rather than a ratio, a stock that fell 2% while the index fell 8% shows a positive RS of +6pp: it lost less, which is what "relative" means.
Rules of thumb
| RS (1 month) | What it usually means |
|---|---|
| Above +1pp and in the top third of your list | Leading the market recently |
| Between -1pp and +1pp | Moving roughly with the market |
| Below -1pp and in the bottom third of your list | Lagging the market recently |
The one-point band and the thirds are the app's conventions for labelling, not thresholds with special meaning. Also note that the rank is relative to your own watchlist: #1 of 5 tells you less than #1 of 40.
What it does not tell you
- Absolute return. Positive RS in a falling market means you lost less, not that you made money. Always read RS next to the actual one-month return.
- Why the gap exists. A sector-wide move, a single earnings day or an index rebalance can all create a large RS reading with very different implications.
- Persistence. One month of leadership is a short window. Leaders rotate, and a stock at the top of the list after a news spike is not the same as one that has led for six months.
In Stock Compass
RS appears as a small chip in the header of the stock card when the full card view is on, coloured green above +1pp and red below -1pp, with a tooltip that names the window and the rank. You can also sort the watchlist by RS to see leaders and laggards at a glance.
In the card verdict, RS drives the first note of the price-momentum section: a leader (above +1pp and in the top third) adds a positive note, a laggard (below -1pp and in the bottom third) adds a caution, anything else is neutral. If RS has not finished computing, the verdict's overall confidence drops to medium and says why. RS also takes part in conflict detection: when fair value says cheap but momentum is weak, the verdict flags "valuation says cheap, price action says weak" and explains the different time horizons.
RS is not a rule indicator in the strategy builder; it is a display and ranking metric only. If you want a rule on relative performance you would build it from the underlying return_20d indicator and a market-index condition instead. The guides Sector rotation and relative strength and Stop chasing the market cover how RS is used in practice.
FAQ
Is RS the same as RSI?
No. RSI compares a stock's own up-days with its own down-days on a 0-100 scale. RS compares the stock's one-month return with an index and is expressed in percentage points, positive or negative.
Why is my RS positive when the stock is down for the month?
Because the index fell by more. RS measures relative performance: losing 2% when the market lost 8% is +6pp. Check the absolute return alongside it.
Which benchmark is used?
It depends on the stock's market — Hang Seng Index for Hong Kong, CSI 300 for mainland China, S&P 500 for the US. Each watchlist market is ranked separately against its own benchmark.
Can I write a strategy rule on RS?
Not directly; RS is shown on cards and used in the verdict but is not a rule indicator. You can approximate it in the builder by combining a stock's 20-day return with a market-index condition.
Definition only — not investment advice.