We use cookies to provide some features and experiences in QOSHE

More information  .  Close
Aa Aa Aa
- A +

Sail Through Market Volatility With These 4 Low-Beta Stocks

1 13 19
22.09.2021

Coronavirus vaccines are rolling out at a healthy pace, making scope for more people to socialize and attend office. Despite this, markets have become volatile since concerns over the spillover effects from China’s property market are gripping investors.

Hence, creating a portfolio of low-beta stocks is of utmost importance since the securities will not only deliver healthy returns but also provide a shield against choppy market conditions.

Beta measures the volatility or risk of a particular asset in comparison to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.

If a stock has beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.

For example, if the market offers a return of 20%, a stock with beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.

We have taken beta between 0 and 0.7 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take........

© Entrepreneur


Get it on Google Play