The Industry Outlier tool makes it easy to find stocks that have been behaving differently from their peers, ie: outliers. The underlying principle is that stocks within the same Industry tend to exhibit similar price movements over time if they are influenced by the same fundamental factors. With that in mind, there is value in being able to identify stocks which for whatever reason, are outperforming or under performing their peers in the same Industry.
The Industry Outlier tool allows users to select from over 100 Industries and generate a correlation scatter chart of every stock within the selected Industry relative to a choice of ETF's. Alternatively the average correlation of each stock relative to the others can be calculated and used as the axes data. This allows stocks to be directly compared to each other in terms of how correlated their movements have been.
Lastly, users also have the option to generate charts from custom stock lists instead of using existing Industries. This allows users to group and analyze stocks according to whichever underlying similarities they feel are appropriate.
More information on the tool is available here:
For more articles on strategy, tips, education and stock market analysis - click here to subscribe to our free newsletter