What Is an Asset Price Ratio? Compare Two Assets Like a Pro

Compare two assets with our Asset Price Ratio Tool. Analyze relative performance, EMA 50/200 trends, and identify outperforming stocks, ETFs, and indices.

Yuri Drabik

Feb 27, 2026

Investors often ask a simple but powerful question:

Is Asset A outperforming Asset B?

The answer isn’t found by looking at two separate charts. It’s found by using an asset price ratio.

An asset price ratio compares the price of one asset (the primary asset) to another (the base asset) to measure relative performance over time. Instead of asking whether both assets are going up or down, you’re asking:

Which one is winning?

This type of analysis is essential for portfolio allocation, sector rotation, risk management, and identifying market leadership.

In this guide, you’ll learn:

What an asset price ratio is

How a price ratio chart works

How to interpret relative strength

Real-world examples (Gold vs S&P 500, Stock vs Bitcoin)

How to use moving averages in ratio analysis

When to apply ratio analysis in your strategy

What Is an Asset Price Ratio?

An asset price ratio is calculated by dividing the price of one asset by the price of another.

Formula:


Price Ratio = Primary Asset Price ÷ Base Asset Price

For example:

GLD (Gold ETF) price = $180

S&P 500 Index = 6,000

Ratio = 180 ÷ 6,000 = 0.03

This number by itself isn’t important. What matters is how it changes over time.

If the ratio rises → Gold is outperforming the S&P 500

If the ratio falls → Gold is underperforming

This transforms your perspective from absolute returns to relative performance.

Why Asset Ratio Analysis Matters

Most investors focus only on price direction.

That’s incomplete.

If two assets both rise 10%, but one rises 20% and the other rises 5%, capital should logically flow toward the stronger performer.

Asset ratio analysis helps you:

Identify market leaders

Spot sector rotation

Compare stocks vs indices

Analyze defensive vs risk-on assets

Build relative strength strategies

Optimize portfolio allocation

Professional fund managers rely heavily on ratio charts for this reason.

What Is a Price Ratio Chart?

A price ratio chart plots the historical ratio between two assets over time.

Instead of viewing two separate charts, you see a single line representing their relationship.

For example:

Gold vs S&P 500

Apple vs Nasdaq

Bitcoin vs QQQ

Energy sector vs Technology sector

When the chart trends upward, the primary asset is gaining relative strength.

When it trends downward, it is losing strength.

This gives a clean visual signal for capital rotation.

Example 1: Gold vs S&P 500 Ratio

The gold-to-S&P 500 ratio is one of the most widely watched macro indicators.

When the ratio rises:

Investors prefer safety (gold)

Risk appetite declines

Equity markets may be under pressure

When the ratio falls:

Stocks are outperforming

Risk appetite is strong

Bull markets often dominate

Instead of guessing whether gold or stocks are better, the ratio tells you clearly.

Example 2: Stock vs Index Comparison

Suppose you want to know whether Apple is outperforming the Nasdaq.

Looking at two charts can be misleading.

Instead, divide:

AAPL ÷ QQQ

If the ratio trends higher, Apple is beating the index.

If it trends lower, Apple is lagging.

This helps you:

Identify true market leaders

Avoid weak stocks in strong markets

Allocate capital to outperformers

Relative Strength vs Asset Price Ratio

These terms are often confused.

Relative Strength (RS) measures performance versus a benchmark.

Asset Price Ratio is the mathematical foundation behind that measurement.

The ratio chart is the raw data.

Relative strength is the interpretation.

Important:

This is different from RSI (Relative Strength Index), which measures momentum on a single asset.

Ratio analysis compares two different assets.

Using Moving Averages in Ratio Analysis

One of the most powerful techniques is applying moving averages to a ratio chart.

Common settings:

EMA 50 (medium-term trend)

EMA 200 (long-term trend)

How to interpret:

Ratio above EMA 50 and EMA 200 → Strong relative uptrend

Ratio below both → Relative weakness

EMA 50 crossing above EMA 200 → Bullish relative shift

EMA 50 crossing below EMA 200 → Bearish relative shift

This helps filter noise and identify trend changes in leadership.

How Portfolio Managers Use Asset Ratios

Institutional investors use ratio charts for:

1. Sector Rotation

Comparing:

Technology vs Financials

Growth vs Value

Small Caps vs Large Caps

Whichever ratio trends higher receives more allocation.

2. Risk-On vs Risk-Off Analysis

Comparing:

Stocks vs Gold

Stocks vs Bonds

High-beta vs Low-beta assets

This helps assess market sentiment.

3. Crypto vs Equity Markets

Bitcoin vs Nasdaq ratio shows whether capital is rotating into speculative assets.

When BTC outperforms equities, risk appetite is expanding.

4. Pair Trading Strategies

Advanced traders use ratios to:

Identify divergences

Trade spread reversals

Hedge correlated assets

When Should You Use Asset Price Ratio Analysis?

Use it when:

Choosing between two investment options

Comparing stock vs ETF

Evaluating sector strength

Allocating capital dynamically

Managing multi-asset portfolios

Avoid using it when:

Comparing assets with completely different volatility profiles without context

Ignoring fundamental drivers

Ratio analysis is a decision tool - not a prediction engine.

Common Mistakes in Ratio Analysis

1. Ignoring Trend Context

Short-term spikes don’t equal structural leadership.

2. Comparing Unrelated Assets

Gold vs a micro-cap stock may not provide meaningful signals.

3. Overreacting to Small Fluctuations

Zoom out to see the macro trend.

4. Confusing RSI with Relative Strength

They measure entirely different things.

Asset Types You Can Compare

A proper asset price ratio tool should support:

Stocks

ETFs

Indices

Crypto

Forex pairs

Commodities

This allows for multi-asset macro analysis.

Examples:

SPY vs QQQ

GLD vs GSPC

BTC vs Nasdaq

EURUSD vs DXY

Energy ETF vs S&P 500

How to Compare Two Assets Step by Step

Go to the Investorean’s Asset Price Ratio tool

Select your primary asset.

Choose your base asset.

Generate the price ratio chart.

Add moving averages (EMA 50 & EMA 200).

Identify trend direction.

Confirm using performance metrics.

Adjust allocation accordingly.

This process removes guesswork and adds structure.

Why Asset Ratio Analysis Is Superior to Absolute Returns

Absolute returns answer:

“Did this asset go up?”

Relative analysis answers:

“Did this asset outperform alternatives?”

Capital naturally flows toward relative strength.

Understanding that flow gives you an edge.

Summary

The asset price ratio is one of the most underutilized but powerful tools in investment analysis.

It helps you:

Identify outperformers

Detect market rotation

Improve allocation decisions

Trade leadership shifts

Reduce emotional bias

If you want to make smarter allocation decisions, you need to stop looking at isolated charts and start analyzing relationships between assets.

Because in markets, performance is always relative.

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