If I told you I was a fast runner, that alone may not mean much. Relative to Usain Bolt, I'm probably pretty slow (I'll give him some credit for all those Olympic medals.) Compared to my youngest daughter, I am very fast in her eyes. Actually, she is very fast for her age, "relatively speaking."
This term can be a big help when seeking the right investments to purchase for your portfolio. Known as "relative strength," it represents measuring the performance of one security's price performance to another. On a chart, a line will show this ratio. If the line is moving up, the first security in the ratio is outperforming the second security of the ratio over the timeframe being viewed. By understanding how one investment has performed compared to another option you may be considering, you can often make a better-informed decision about which may be the right choice for your portfolio.