Cumulative Outperformance | viResearch

Cumulative Outperformance | viResearch

Conceptual Foundation and Innovation

The "Cumulative Outperformance" indicator by viResearch is a relative strength analysis tool designed to measure an asset’s cumulative performance against a chosen benchmark over a user-defined period. Rooted in comparative return analysis, this indicator allows traders and analysts to assess whether an asset is outperforming or underperforming a broader market or sector, offering insights into trend strength and leadership.

Unlike traditional relative strength indicators that may rely on static ratio comparisons, this script uses cumulative return differentials to provide a more contextual understanding of long-term performance trends. A clean visual representation and dynamic text summary are provided to highlight not only the degree of outperformance but also the directional status — making it accessible to both novice and advanced users.

Technical Composition and Calculation

The indicator compares the cumulative returns of the selected asset and a benchmark symbol over a specified lookback period (length). Returns are calculated as the percent change from the current price to the price length bars ago.

This differential is plotted and color-coded, with a baseline zero line to make outperformance and underperformance visually distinct. A dynamic table in the bottom-right corner displays real-time values for the benchmark symbol, the current outperformance percentage, and a status label (e.g., "Outperforming", "Underperforming", or "Even").

Additionally, a floating label is plotted directly on the chart to make the latest outperformance value immediately visible.

Features and User Inputs

The script includes the following customizable inputs:

• Start Date: Defines the point from which to begin tracking outperformance data.
  
• Length: The period over which cumulative returns are measured.
  
• Benchmark Symbol: Select any market index, stock, or crypto as the benchmark (e.g., INDEX:BTCUSD, SPX, etc.).
  

Practical Applications

This indicator is especially effective in:

• Identifying Market Leaders: Compare sectors, stocks, or altcoins against a leading benchmark to identify outperformers.
  
• Sector Rotation Strategies: Monitor when certain assets begin to outperform or lag behind the broader market.
  
• Cross-Market Analysis: Compare crypto pairs, equities, or commodities to their sector benchmarks to find relative strength opportunities.
  

Visual Aids and Alerts

• A purple outperformance line highlights the degree of cumulative difference.
  
• A horizontal dotted white line marks the baseline (zero performance difference).
  
• Real-time table overlay updates the benchmark name, performance delta, and relative status.
  
• Alerts are built-in to notify users when assets begin to outperform or underperform, helping you stay ahead of major shifts.
  

Advantages and Strategic Value

• Benchmark Flexibility: Analyze any asset class against any benchmark of your choice.
  
• Visual Clarity: Dynamic labels and tables make performance tracking intuitive and immediate.
  
• No Repainting: Calculations are based on closed bar data for consistent backtesting and real-time use.
  

Summary and Usage Tips

The "Cumulative Outperformance | viResearch" script offers a clean and effective way to visualize relative strength between any asset and its benchmark. By focusing on cumulative returns over time, it filters out short-term noise and gives a strategic view of long-term strength or weakness. Use this tool in combination with other momentum or trend-following indicators to refine your market entries and asset selection.

Note: Backtests are based on past results and are not indicative of future performance.