Relative strength is calculated as the ratio of the active symbol vs the symbol selected in the Relative Strength indicator (the S&P500 index on the chart below--sym SPX).
When the relative strength line is moving up, the active symbol is outperforming the RS symbol and under-performing when the line is moving down.
Sometimes referred to as a "ratio chart".
The chart below has a Comparison plot of the S&P500 overlayed on CAH to illustrate how CAH is outperforming the S&P500 when the RS indicator is moving up and underperforming when the RS plot is moving down.
You can choose different symbols on which to base the relative strength.
- Main Chart Symbol (the active symbol)
- Option Symbol (a selected strike/expiration)
- Symbol (any symbol can be entered)
- Color group (a chart in a different symbol color group)
Read more about Relative Strength at Investopedia