Price Ratio Study

By Samantha Baltodano

TL;DR:

The Price Ratio study is used to compare the price between two securities of your choosing. When the ratio grows, the plot is displayed in green, otherwise it is displayed in red. Two Simple Moving Averages of the ratio (one fast and one slow) are also plotted alongside the Price Ratio.

What Is the Price Ratio Study?

The Price Ratio study compares the prices between two symbols of your choosing. 

This relationship is expressed as the ratio of the first symbol's close price to the close price of the second symbol. 

Note that the close price is used by default, but other price values (low, high, open) can be used as well. The ratio can also be modified if you add multipliers to the prices (by default, these are both set as equal to 1.0). Price types, symbols, and multipliers can be modified using input parameters. 

When the ratio grows, the plot is displayed in green, otherwise it is displayed in red. 

In addition to its main plot, the study also displays two Moving Averages of the ratio: a fast and a slow one. 

By default, these are Simple Moving Averages that have lengths of 4 and 40-days. 

The type and the lengths of the averages can be customized, however, the length of the fast average cannot be greater than the length of the slow one. 

Summary

• As the name suggests, the Price Ratio study compares the price of two securities in the form of a ratio.
• The ratio can be modified to adjust price type (close, high, low, open), multiplier (1.0 by default), and symbols.
• Two Simple Moving Averages are also plotted alongside the Price Ratio line.

Price Ratio is just one of many studies that Archaide automates. For a full list of strategies and studies available click here.

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