Relative Rotation Graphs (“RRG charts”) show you a security's relative strength and momentum relative to a collection of other securities. RRG charts were developed by Julius de Kempenaer and have been available on Bloomberg terminals since 2011. RRG charts differ from most other financial charts in that the horizontal axis does not represent time. An RRG chart is a scatter plot with Julius' Relative Strength Ratio indicator as the horizontal axis and his Relative Strength Momentum indicator as the vertical axis.
Note: Both “Relative Rotation Graph™” and “RRG™” are registered trademarks of RRG Research.
Here's an example of an RRG chart:
Note that each symbol on an RRG chart is plotted as a dot with a “tail” extending backwards. The tail shows you the history of the symbol's position in the past. You can use a slider to control the length of the tail.
Each dot on each symbol's tail represents one period - either one week or one day depending on the “Period” setting. The large dot at the end of the tail represents the current RRG values for that ticker symbol. Those values are updated continually throughout the current trading week however new dots are only added at the start of a new week.
Also note the there are four quadrants on the chart:
As you can see in the example above, stocks typically progress through the quadrants in a clockwise manner.
The color of each line is determined by the color of the quadrant where the line ends. The width of each line is determined by the ending dot's distance from the center of the plot.
Free users are only able to see a single, fixed RRG chart that consists of the major North American market averages with 3 years of data. Free users can change the chart's ending date, trail length and scaling but they are not able to add/remove ticker symbols, view longer range data, or resize the chart.
Members can also create RRG charts from their ChartLists. There is an upper limit however to the first 48 tickers with $SPX being the default benchmark.
There are several ways to create an RRG chart including:
Members can use the text box at the top of the RRG tool to change the list of symbols used in the chart. Or they can select from one of several predefined symbol groups using the “Groups” dropdown. Up to 30 different ticker symbols can be charted on an RRG chart.
Members can also change the RRG chart's “Benchmark” symbol - the symbol (typically an index like $SPX) that is used in the relative performance calculations. A line chart of the benchmark symbol is always displayed to the right of the RRG chart.
The RRG Chart Tool has several different elements:
Next to the RRG chart is a smaller chart of the S&P 500 Large Cap index. You can click anywhere on that graph to change the ending date for the RRG plot. The S&P 500 chart is meant to give you a sense of what the market as a whole was doing at the time of the RRG plot. In addition to clicking on the S&P chart, you can also click and drag to manually animate things.
In addition, you can use the left and right arrow keys on your keyboard to change the ending date.
You can also press the “animate” button below the S&P 500 chart to automatically move the RRG plot through all the available data.
You can use the “Tail Length” slider below the S&P 500 chart to adjust the length of the tails on the RRG plot. The zone highlighted in blue on the S&P 500 chart shows to the period of time covered by the tails.
You can click on any of the lines in the Symbol Table below the RRG Plot to turn on highlighting for that symbol. Click on the line again to turn off highlighting. Only one line at a time can be highlighted.
You can use the buttons below the S&P 500 chart to adjust the RRG plot's scaling.
In addition to those buttons, you can also click on the RRG plot itself and drag to change the position of the chart's origin.
Members can use the “Years” dropdown to create longer-term RRG charts. The choices available are 1, 3, 5 and 10-years. Longer duration charts take longer to load.
Note: A ticker symbol must have at least 1-year's worth of data in order to appear on an RRG chart.
Normally, RRG charts use weekly data in their calculations. Members can change the chart so that it uses daily data using the “Periods” dropdown located next to the “Update” button. See this article on Daily RRG Charts for more details.
Members can click and drag the resize icon in the lower right corner of the RRG chart to resize the size of the chart. In addition, you can click the “Maximize” icon in the upper right corner of the chart to expand it to occupy the entire browser window.
Members can click the “Linkable version” link located below the symbol table to get a link to their chart that can be bookmarked and/or used in web links. To bookmark that link, follow these steps: