A Relative Rotation Graph®, or RRG®, is a visualization tool that shows the rotational characteristics of trends in relative strength of multiple sectors (securities) in one graph. RRG shows the relative movement of securities against a common benchmark and against each other; illustrating “the BIG picture in ONE picture.” This unique chart format allows users to visually filter strong and weak relative trends among multiple securities in one image.
Every investor is familiar with sector and asset class rotation, but until RRGs became widely available it was hard to visualize this “rotational” sequence on classical timeseries data charts showing price/time. RRGs are often used in equity sector rotation strategies but can be applied to any asset class. As such, they are ideal for use in asset allocation. Julius will share the basic principles of RRG, how they were “born” and explore the application of this powerful tool in the Indian markets.