![]() ![]() ![]() Relative strategies compare the momentum of different assets to each other and absolute momentum is not concerned with the performance of other assets as it only focuses on that stocks past return in predicting future returns. Momentum strategies can either be relative or absolute. When the strategy uses earnings then it is an earnings momentum strategy and in the case of using price then it is a momentum strategy. Pinto, Henry, Robinson and Stowe (2010) define momentum indicators as valuation indicators that are based on the relationship between price or another fundamental, earnings for example, to a time series of its historical performance or to the fundamental’s expected future performance values.
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