Relative PE
PE comparisons are more meaningful if they are made between similar companies. They are very often used to compare companies in the same sector, which are presumed to have similar long term growth prospects.
Relative performance evaluation is when performance is judged relative to a comparison group or person instead of an absolute standard. Relative performance evaluation works best when random events affect all divisions and all managers being compared.
Absolute versus Relative Performance
In the USA and the UK, two of the world's most sophisticated fund management markets, the tradition is for institutions to manage client money relative to benchmarks.
Relative PE A firm or industry's price to earnings ratio divided by the market price to earnings ratio.
Comparison universe The collection of money managers of similar investment style used for assessing relative performance of a portfolio manager.
During the 1970s, inflation rose in the United States, as well as in many other industrial nations, to levels unprecedented on a multiyear basis during periods of relative peace.
Asset allocation for the individual investor usually focuses on relative percentages of bonds and stocks (eg, 60% stocks and 40% bonds). Bonds provide safety and steady interest payments.
form of financial statement analysis in which the relative percentages of financial statement items as well as their dollar amounts are shown.See also vertical analysis .
Referring Terms:
percentage statement ...
An index used by bond funds as a benchmark to measure their relative performance. The index includes government securities, mortgage-backed securities, asset-backed securities and corporate securities to simulate the universe of bonds in the market.
The collection of money managers of similar investment style used for assessing
relative performance of a portfolio manager.
Complete capital market
A market in which there is a distinct marketable security for each and every
possible outcome.
This information sheds a completely different light on the relative performance of each unit. Remember that the two units are not far apart in overall profitability.
brand recognition - Positions customer's relative perceptions of one brand to other competitive alternatives.
A group of money managers of similar investment style used toassess relative performance of a portfolio manager.
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Personal Finance Glossary ...
The composition of the asset mix within a portfolio, constructed with the objective of meeting the long-term views of relative performance of the various asset classes. Usually a benchmark is derived in this fashion.
COMPARISON UNIVERSE - A group of money managers of similar investment style used to assess relative per...
COMPARITOR - A device of some kind that compares two inputs.
This strategy employs a variety of methods and styles, and unlike traditional investment funds, they are not concerned with relative performance against a stated benchmark or index.
The above graphs demonstrate that the market looks very different in different time periods and it is therefore very dangerous to make assumptions about the relative performance of stocks and bonds in the next 20 years.
Profitability ratios are used to decide whether a company is earning acceptable profits and to determine whether the profits trend is rising or falling. They are also used to compare the relative performance of companies in a given sector.
 See also: Banks, Expense, Saving, Values, Expected return
  
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