Ratio Charts are a visually powerful way to see relationships and trends between two different sets of time series data. For example, how Amazon is performing price wise relative to Microsoft over time.
Note: There is a more in-depth discussion of the practical use of ratio charts in our Ratio Chart blog post.
With Ratio Charts you select a ticker and a metric for that ticker as the numerator and then select another ticker and metric as the denominator. The tickers can be the same or different. Likewise for the metrics. Once the numerator and denominator are specified, Stock Rover will create the ratio line chart in a new separate chart panel.
The most common case with Ratio Charts is to use price as a metric and two different tickers for the numerator and denominator (e.g Amazon price / Microsoft price). However the same ticker could be chosen with two different metrics (e.g. Apple Price / Apple Sales). You could even do something like Ford sales / GM net income. With Ratio Charts you can select from over 100 chartable metrics.
A powerful feature of Ratio Charts is the ability to plot additional technicals that are computed from the ratio line. The following Technicals are available in Ratio Charts: Simple Moving Average, Exponential Moving Average and Bollinger Bands.
The Ratio Chart option is available from selecting the Technicals pull down menu as seen highlighted below. The window appears where you can select your tickers, metrics, and turn on any technicals you want to include.
To change the metric, click into the metric box and start typing and it will bring up a list of available metrics that match as seen in the screenshot below.
The chart seen here shows an example of ratio chart looking at Sales between two different companies. The chart has the 10 year time frame selected.
The chart seen here shows an example of ratio chart looking at Price between two different companies, with the Simple Moving Average technical selected. The chart has the 2 year time frame selected.
Ratio Charts are available to Premium Plus subscribers.
