Ratio¶
| Name | Type | Prerequisite | Use Cases |
|---|---|---|---|
| Ratio (RAT) | Relative Value | OHLC Data | Inter-market analysis (e.g., Gold/Silver ratio) to find relative outperformance. |
Definition¶
The Ratio indicator simply divides one data series by another (e.g., Item A / Item B). It is used to compare the relative strength or valuation of two assets.
Mathematical Equation¶
\[
\text{Ratio} = \frac{\text{Series A}}{\text{Series B}}
\]
Special cases¶
- Maximum possible value: Unbounded
- Minimum possible value: 0
- Behavior: Moves independently showing the relative performance or spread between two assets/series.
Visualization¶
Trading Significance¶
- Relative Strength: Used to see if one asset is outperforming another (e.g., Tech vs. SP500).