One of the many free resources on StockCharts.com is that you can compare one stock to another via a ratio. In the symbol field type a symbol then a colon then the other symbol, as an example BP:XLE to compare BP to the Energy Sector SPDR (XLE).
Here is how it looks;
The chart allows you to see changes in the relationship. This is read kind of like reading a currency quote. The downward direction shows BP lagging behind XLE for the last year.
At times the lag of BP accelerated and at times it took some back.
You can see below what this looked like on a normal comparison chart.
There are probably quite a few uses for this (read the link above to Barry's site for one). I think the utility for me will be to have a better feel for how a stock is doing vs. all of the roles it plays in the portfolios I manage.
What I mean is if a stock serves as proxies for a country, a sector, is a high yielder and a large cap I can compare that stock in this manner vs. benchmarks (or more simply ETFs when applicable) for all those functions.This has the chance to be a message of the markets analysis which I believe has value.
Work in progress.
13 comments:
I almost live at stockcharts.com when making decisions about sectors and mutual fnds. Should you not already know about Perfcharts (performance comparison charts), you can enter more symbols than anyother free website that I know. The time tab in the lower left column is very handy and their own default comparison charts are pretty good.
The one below is the one I use that begins my top down analysis. I do not use the ratio chart as much as I used to. The visuals of the perf chart offers a wider perspective, though for one to one comparsion ratio charts are nice. Also may offer a good time to know when your stock choice has gotten too far ahead of the sector and it's time to take profits.
http://stockcharts.com/webcgi/perf.html?IJK,IJJ,IJS,IVE,IVW,IJT,VTI,efa
thank you
Roger- do you use any "professional" financial software services? eg Bloomberg, FactSet, Reuters, etc.
We do not have a Bloomberg Terminal in our office but I have access through Schwab's Insitutional desk and through a couple of friends who work elsewhere.
With all due respect, Roger,you are an enigma. You have the credentails good enough for street.com.(no sarcasm implied)You are obviously a seasoned investor who knows about caution and how to stay in the game. You aren't following the herd with cookie cutter portfolios. You are a cordial host blogger that got the recogntion of Forbes. But, if you were to be granted any research data, any software, or any specialized analysis would you be interested? Is there anything on your wishlist, or you from the school of less is more?
Esp. helpful when you look at the P&F chart.
I'm an enima? Humor attempt.
for me having a Bloomberg Terminal would be sufficient. I had one at my disposal from 1994 until 2002. There is nothing that we could think of that isn't there somewhere. Sometimes finding is tough though.
Our firm is growing nicely, but still tiny and I expect we will get one in the next year or two (please do not take this as a pitch, this is just my personal assessment of where we are and where we will be).
More to the point of this site the portfolio tools on Morningstar are very good. There may be a better mousetrap out there. I recently had a free trial to portfolioscience.com that I thought was great, it seems like it fills in the gaps from M-star. I have been meaning to sign up but haven't gotten around to it.
Between bigcharts.com and stockcharts.com I have charting covered for my purposes.
I don't care for stock screening sites/software so I have nothing there.
My needs are few and far between as I think too much of this stuff and all you see are trees.
I like to watch $NDX:$SPX as a kind of convergence/divergence indicator.
$INDU:$USB is a handy stock/bond indicator.
$XAU:$GOLD tells me when the goldminer stocks are ahead of or trailing the metal.
ANYTHING:$SPX will tell you how anything is doing relative to the S&P or pick your own favorite benchmark.
Fred
The ratio charts are interesting. Check out the SMH:QQQQ or vice-versa. I think it's interesing with the BBands wrapped around them.
Fred and Muckdog, thanks for shares these with us.
I use stockcharts a bunch. Like to look at both daily and weekly. And plot anything against TLT to see that index or stock against a risk free rate of return.
Also plot noncorreleated items too gold against tlt or oil etc.
careful with TLT as a proxy for risk free. A 20 year bond has plenty of price risk until maturity in 20 years.
Usually risk free is thought of as 3 month t-bill or maybe even 6 months. I'm not sure the equivalent symbol on Stockcharts.com but ^irx will work on YHOO for risk free yield, if not price.
Post a Comment