Chart Benchmark: Relative Strength Is Where the Alpha Lives

Why Relative Performance Is What Trades

A stock up 8% in a month looks great until you learn the market was up 12%. That's not alpha; that's a 4% drag. Conversely, a stock down 3% while the market dropped 10% quietly outperformed by 7%. Relative-strength analysis — your stock divided by a benchmark, plotted as a ratio — is the cleanest way to see what's actually happening underneath the absolute price action. Long-duration relative-strength uptrends are one of the highest-conviction technical setups in the public literature; the pattern works equally well for shorts.

What the Benchmark Card Shows

The Chart Benchmark card plots the relative-strength ratio of the viewed ticker vs a configurable benchmark (defaults to SPY; sector ETF and peer-group options are one click). The ratio line is plotted with a moving average and a slope indicator, so periods of accelerating outperformance / underperformance are visually obvious. A correlation strip shows rolling 60-day correlation with the benchmark so you can see when the stock is decoupling from or converging with its reference.

Reading the Ratio

Two patterns are the durable ones. First, sustained ratio uptrends with low correlation mean genuine idiosyncratic alpha — the stock is rising *because of something specific*, not riding the tape; these are the setups where good fundamentals and technical work compound. Second, ratio breakouts from long consolidations (2-3 months of sideways ratio followed by a clear breakout) have historically preceded extended multi-month outperformance; this is the Mark Minervini / William O'Neil school of relative-strength trading, and the setup still works.

Where It Fits

Pair with Trade Signals for single-name technical confirmation and Volume Profile for the structure beneath the price. For context beyond the single benchmark, also use the Peer Comparison card on the fundamentals side.

Open the Benchmark card → /app/stocks/AAPL/chart