Relative strength ranking
Sorting stocks by how much they rose compared with the others.
Relative strength ranks every stock by its recent return against the rest: the top of the list rose the most, the bottom fell the most. It is the engine behind most momentum pitches, "buy the leaders", and behind the top-gainers lists that trading apps show first.
The ranking is easy to compute and looks like insight because the leaders of last month are, by definition, the stocks that were in the news. Whether they keep leading is the empirical question, and the answer depends on the horizon, the universe and the costs. The logbook found that among large, heavily traded companies, ranking by last month's return selected nothing once the market's own rise was removed.
Where this word comes up
First needed in the log entry H-044 · Short-term momentum in large caps: no robust edge in our test.
From the same entry: Betting against losers, High turnover, Liquid names, Momentum, Multiple testing, Shuffle test, The null.