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MarketQuants — Diamond Score

The Composite Score helps us answer one important question first: "What is moving right now?" In other words, what is actively being repriced by the market.

Once we’ve identified those stocks—ranked across the S&P 500 based on short-term momentum—we take the next step. We ask a different question:

"How healthy is that price movement across both short-term and long-term timeframes?"

That’s where Diamond Score comes in.

What the Diamond Score Measures​

The Diamond Score evaluates price health, not just price motion.

Rather than focusing only on short-term momentum, it blends four timeframes to understand how a stock is behaving across both retail-driven and institutionally relevant horizons:

  • Short-term: 5-day
  • Near-term: 20-day
  • Medium-term: 50-day
  • Long-term: 200-day

Each of these periods reflects a different group of market participants. Retail activity tends to dominate the shorter windows, while institutions exert more influence over the longer ones.

The Diamond Score treats all four equally.

How the Score Is Calculated (Conceptually)​

For each timeframe, we do the same thing:

  1. We identify the price range for that period
    • The lowest price
    • The highest price
  2. We look at yesterday’s close and determine where it falls within that range

Think of it like a progress bar:

  • If the stock closes at the lowest point of the range → it earns 0% credit
  • If it closes at the highest point of the range → it earns 100% credit
  • Anywhere in between → it earns partial credit

This process is repeated independently for:

  • the 5-day range
  • the 20-day range
  • the 50-day range
  • the 200-day range

So each timeframe produces a score between 0% and 100%.

Normalizing the Score​

Mathematically, the maximum combined score would be 400%. But instead of inflating the number, we normalize it.

Each timeframe contributes 25% to the final result.

That means:

  • Short-term strength matters
  • Long-term structure matters just as much

The final Diamond Score is a balanced measure of price strength across time.

Visual Interpretation: The Diamonds​

Rather than showing raw percentages, MarketQuants displays the Diamond Score visually.

Each stock is represented by 10 diamonds:

  • Grey diamonds = unfilled strength
  • Gold diamonds = earned strength

💎 A perfect Diamond Score fills all 10 diamonds in gold.

This makes the score instantly readable:

  • More gold diamonds → stronger, healthier price structure
  • Fewer gold diamonds → weaker or less confirmed movement

You’re not interpreting formulas—you’re reading price quality at a glance.

How Diamond Score Complements Composite Score​

These two tools are designed to work together.

  • Composite Score tells you what is being repriced right now
  • Diamond Score tells you how well that repricing is supported across time

A stock can be moving fast but lack long-term support. Another may not be exploding upward, but its price may be strong and well-supported across every major timeframe.

Diamond Score helps you see that distinction.

Why This Matters​

Markets don’t move on one timeframe alone. Retail traders, swing traders, funds, and long-term allocators are all acting simultaneously—often with different goals.

The Diamond Score captures the sum of those forces by asking a simple but powerful question: "Where does today’s price sit within the full context of recent history?"

That’s why Diamond Score isn’t about prediction. It’s about confirmation, balance, and structural strength.

The Big Picture​

  • Composite Score finds momentum.
  • Diamond Score evaluates durability.

Together, they help you understand:

  • What the market is choosing
  • And how confidently it’s choosing it

That’s the role of Diamond Score inside MarketQuants.