About RRG Research

For technical and quantitative analysts, the key concept here is "Relative Strength" (RS).

Through Relative Strength analysis, we can address questions like: "Which market will outperform or underperform another?", or "Which sector will do better than its benchmark or another sector?", and so on.

The good news is that Relative Strength analysis has long been a trusted tool for technical analysts. In fact, it was prominently featured in James P. O'Shaughnessy’s influential book, *What Works on Wall Street*.

The bad news is that traditional RS analysis often requires one-to-one comparison charts, leading to an overwhelming number of possible combinations. Even when limiting the scope to specific universes, such as S&P 500 sectors or individual stocks within a sector, you still end up needing to analyze numerous charts to gain meaningful insights.

For example, breaking down the S&P 500 into its 11 GICS sectors results in 121 possible combinations (11 x 11). Since there’s no need to compare a sector to itself, we can subtract the number of sectors, leaving 110 combinations. Furthermore, comparing Technology to Materials eliminates the need to study Materials against Technology, halving the number of charts needed to 55.

That’s just with 11 sectors. Imagine the complexity when dealing with a sector that has 50 or more stocks, or analyzing all members of the S&P 500 index—spoiler alert: it results in 124,750 possible combinations!

After ROBECO was acquired by RABObank, I found myself on the trading floor of RABObank International in Utrecht, stepping into a sell-side role. I continued in this position until 2007, eventually with KEMPEN & Co.

As a technical and quantitative research analyst, my responsibility was to cover the European stock universe and offer institutional clients market opinions and trading or investment ideas.

Drawing from my buy-side experience, I based all my research on comparative Relative Strength analysis. However, I soon encountered a new challenge. As a sell-side analyst, I had to approach fund managers (our clients) to pitch my ideas, hoping to be rewarded with order flow or cheques. The reality was twofold: I wasn’t the only one competing for their business, and these portfolio managers (PMs) were always busy and in a rush.

To complicate matters, my coverage spanned the entire European stock market, whereas my fundamental colleagues typically focused on one or two sectors. This made it incredibly difficult to align my prepared insights with what the PMs needed at any given moment—assuming I could even get them on the phone.

What I needed was a way to present insights on the relative trends within European equity markets in a concise, clear manner that would serve as a starting point for deeper discussions.

After numerous trials with tables, lists, and various spreadsheet formats, I developed the first version of what would become Relative Rotation Graphs (RRG). This visualization style resonated well with PMs. After an initial adjustment period to this "new way of looking at things," it became a common foundation and starting point for discussions with PMs.

In 2005, I presented an early version of Relative Rotation Graphs at a Bloomberg event in Zurich. One of the BB application specialists who invited me suggested that I share this visualization approach with the "Head of Graphics" in New York. Ultimately, RRG was introduced on the Bloomberg terminal in January 2011.