Does saying it held up better than the Nasdaq mean it made a profit?
Calculate the changes in your stock and the changes in the benchmark separately.
Table of contents
Remember this first
First, 3 things to remember
- 1My stock may have fallen, but it might have fallen less than the market.
- 2You must align the dates with the comparison target.
- 3The fact that it outperformed the index does not guarantee future gains.
Separate your results from relative comparisons.
If a stock goes from 100 dollars to 95 dollars, your holding has fallen by 5%. If the benchmark index fell by 10% over the same period, you could say it "held up better than the market." However, the result for your stock is still a decline.
Changes in the price itself are called absolute returns, while performance compared to other assets is called relative performance. Although the terms may sound complex, it is simply a distinction between your own results and a comparison with others.
Start from the same date.
Calculating one stock from Monday and another index from Wednesday is not a fair comparison. Align the start and end dates, and ensure that splits and dividends are treated the same way.
The table below shows cases that were relatively better even if both declined. It is an exercise in not confusing "stronger" with "making money."
| Asset | Start | Ended | Period return |
|---|---|---|---|
| Stocks | 100 | 95 | −5% |
| Benchmark index | 100 | 90 | −10% |
What did you use as a benchmark?
Nasdaq 100 is not an index that holds all small-cap stocks in the Nasdaq equally. Comparing your stock to an index with a different sector composition may lead to answering the wrong questions.
Although the term RS (Relative Strength) and the RSI indicator have similar names, they are different concepts. First, identify what is being compared in the description next to the numbers.
You should not make such assumptions
“It is stronger than the index, so it is still profitable.”
Your stock may have fallen, but perhaps it fell less. Separate your own results from comparisons with others.
Check what you have read.
- Did you align the start date and end time?
- What did you compare it to?
- Have you mistaken a smaller decline for a profit?
Apply what you read to the actual screen
Try it on WAPE
Source and scope of verification
Reviewed · Version 2
- Relative Strength ComparisonNew window
Fidelity Investments · Verify 2026-10-20
Price ratio relative to a benchmark asset and relative performance. - Nasdaq Composite vs. Nasdaq-100New window
Nasdaq · Verify 2026-10-20
Distinction between Exchange, Composite, and Nasdaq-100; inclusion rules are subject to change
This is educational material for observation and information comprehension. Hypothetical examples do not represent actual stocks or performance and do not provide buy or sell recommendations.