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Relative Strength Momentum

Parent Strategy
Momentum

A technique used in momentum investing, Relative Strength momentum is a strategy used by technical analysts and value investors. It consists of investing in securities that have performed well relative to their benchmark. Relative Strength Momentum depicts the tendency of assets to continue to outperform going forward and assets that performed the worst over the recent past ten to continue to underperform. Also known as cross-sectional momentum, it can also be applied to whole markets or industry sectors using index funds and exchange-traded funds. It can also be applied in real estate using real estate investment trusts, futures, options, other derivative products.

  • Also known as Cross-sectional Momentus
  • Relative Strength Basic Formula:
    • Ask if the return is ranked int the top % among its peers
      • If it is, buy it
      • If it is not, sell it, short it or avoid if (if you don't already own it)

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