Stock Comparison Charts
Wall Street is all about comparison. How do the stock market charts compare to yesterday, last week, or last year?
How does a sector measure up to the market indexes? How do individual stocks compare to an industry and the market? Every market day – even minute – brings all sorts of comparisons.
All traders and investors should become familiar with charts. That’s what we are about here. We’ll cover stock comparison charts and why they are essential to investing at every level.
Learn More About Stock Comparison Charts
Stock Comparison Charts Explained
In short, stock comparison charts track the past to predict the future. There are various types of charts and various price-related indicators they track. You can compare a stock price to the index that lists it or a stock to its sector or competition.
You are looking for past trends that will tell you how a stock might perform in the immediate or long-term future.
There are stock chart patterns, such as line charts, bar charts, and candlestick charts, which require more interpretation because they indicate ranges within ranges.
All of these charts track different time segments. You can compare trading over the long term all the way down to the minute.
Benefits of Stock Comparison Charts
The benefits are many — they provide valuable insights into stock performance and facilitate comparisons across companies, sectors, and market indexes.
We’ve summarized some of the most important advantages chart comparisons bring to help you improve your portfolio management skills.
Measurement
Stock comparison charts are vital to investors because you can measure a stock against the market, sector, and competition. You can make these comparisons over the long term, which concerns most investors.
Comparison
You can compare an unusual spike in a stock to the news surrounding the time to help explain that move. And you can identify patterns that may indicate a future swing.
Timing
As timing is a big factor in trading, stock charts can help you hone it and help you set loss or gain limits for buying or selling.
Decision Making
They serve as essential tools for making the right decisions about buying, holding, or selling a stock, allowing investors to manage their portfolios better.
Risk Assessment
They can help investors evaluate the potential risks associated with a particular stock by analyzing historical performance, volatility, and market trends, leading to better risk management strategies.
All of this helps you decide whether to buy a stock, keep it, or weigh it more heavily in your portfolio. A comparison chart should be one of the first references you turn to for decision-making.
How to Set Up and Compare Charts?
You can compare stock charts online and through software. Here are some good sources:
Charts Comparison Through Yahoo Finance
- Visit Yahoo Finance and use the search bar to find a company by name or ticker symbol.
- Click on the displayed chart or the word “Chart” at the top after selecting the company.
- View the stock chart, and adjust the time frame and chart type as desired.
- Click “Comparison” at the top, add another company or index, and view the combined chart.
Charts Comparison Through Google Finance
- Visit Google Finance and search for a company using its name or ticker symbol.
- On the company page, view the stock price, and daily chart, and adjust the time range as needed.
- Click “Compare” below the chart, select from suggested indexes/companies, add your own, and compare multiple companies/indexes on the same chart.
Through a Stock Tracking Software (StockMarketEye)
- Download StockMarketEye and get a 30-Day FREE trial.
- Select the stock you want to use as a benchmark.
- Click “Compare to…” and type in or select the stock or index you want to compare.
- The chart to compare to will be reflected, and you’ll be able to make comparisons.
- If you’d like to remove a stock, hit the X symbol.
Best Practices for Using Stock Comparison Charts
When analyzing and comparing stocks, it’s crucial to consider various factors that contribute to a comprehensive understanding of their performance. We discuss six key aspects to focus on when comparing stock charts.
#1. Compare Same Sector Companies
When analyzing stock comparison charts, focus on companies within the same industry or sector.
This approach allows for a more accurate assessment of their performance against direct competitors, such as Apple vs. Microsoft in technology or Exxon vs. BP in energy.
#2. Consider Market Cap Size
Market capitalization is an essential factor in comparing stocks. Companies of different sizes can have varying growth patterns and risks.
Select competitors within the same market cap range to ensure a fair comparison and better understand a company’s performance against its direct competition.
#3. Evaluate Against Overall Market
To gain valuable insights into a company’s performance, examine how it fares against the overall market or the index that lists it.
Identifying trends or patterns in the stock’s performance can provide useful information about potential future moves and indicate the stock’s resilience under different market conditions.
#4. Select an Appropriate Time Range
Choose a suitable time range for your stock comparison chart to align with your investment strategy.
Since stocks are generally considered good long-term investments, it’s recommended to use a time range of one to five years or more.
This longer time frame allows investors to make more informed decisions based on historical performance.
#5. Investigate Unusual Stock Price Movements
When you notice an unusual spike or slump in a stock’s price, it’s essential to research the underlying cause.
Investigate any news or events that occurred around the corresponding time, as they may explain the anomaly.
Understanding the reasons behind such price movements can help you make more informed investment decisions.
#6. Assess Other Metrics
In addition to price comparisons, consider evaluating other key financial metrics such as earnings per share (EPS), price-to-earnings ratio (P/E), and dividends.
Analyzing these metrics can provide deeper insights into a company’s financial health, growth potential, and overall value.
However, be mindful not to cram too much information into your analysis, as the goal is to maintain a clear and comprehensive picture of the stock’s performance.
Start Comparing Like a Pro with StockMarketEye!
Knowing how to use a stock chart is a big part of the investing game. But it’s not the know-all, tell-all. You need access to a complete analysis like the one StockMarketEye provides.
Not only does our software provide charting that looks at a stock in several different ways. It offers a comprehensive analysis of all factors that go into a stock’s value.
In today’s fast-moving market, it helps to have the power to evaluate like a pro. And there is no time better than now to give StockMarketEye tracking software a look and discover the advantages that will put your portfolio into complete perspective.