Breadth Ratio
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Topics: B, A/D line, Advance/Decline, Breadth ratio, Market breadth, Stock, Stock market
Breadth ratio definition
Breadth Ratio is a measure of breadth of a stock market. Similarly to the Advance/Decline line or index, it compares the number of rising stocks to the number of falling stocks in a particular period. But unlike the A/D line, the breadth ratio divides the number of rising stocks by the number of falling stocks.
Breadth ratio can be measured for any time period, but most frequently for a day, week, or month.
Breadth ratio range of values
As the numbers of advancing and declining stocks can’t be negative, the breadth ratio can reach only positive values. The closer the breadth ratio is to zero, the greater share of individual stocks in the market is declining. Conversely, the higher the breadth ratio, the greater the percentage of advancing stocks. The maximum value the breadth ratio can reach is infinite in case when all stocks in the market are rising during the period measured.
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Topics: B, A/D line, Advance/Decline, Breadth ratio, Market breadth, Stock, Stock market