Relative return

The return that an asset achieves over a period of time compared to its benchmark. The relative return is the difference between the absolute return of the price of an asset and the return achieved by the benchmark.

In the above case, the absolute return for Apple in 2011 is 26%, while the absolute return for the Nasdaq, which is Apple’s benchmark, is -1%. Thus, Apple’s relative return is its return over and beyond that of its benchmark:

Relative return = Absolute return of asset – absolute return of benchmark