8 S&P 500 Stocks With The Highest Betas

Some of the biggest trading opportunities in the market come from the most volatile stocks in the market. These stocks can also be dangerous to trade, creating a high-risk/high-reward scenario.

Volatility can be difficult to predict, but beta is one metric traders use to identify stocks that are most prone to volatility.

Beta Explained

Beta is simply a measure of the relative volatility of a stock. Beta is calculated in relation to a benchmark, such as the S&P 500 for U.S. stocks. A beta of 1.0 means that a stock has historically demonstrated volatility in line with its benchmark. A beta greater than 1.0 suggests the stock is more volatile than the benchmark, and a beta less than 1.0 suggests the stock is less volatile than the benchmark.

For example, a U.S. stock with a beta of 1.5 has historically been 50% more volatile than the S&P 500. Typically, the stocks with the highest betas tend to be smaller-cap stocks, while large-cap stocks have lower betas.

8 High-Beta Stocks

Here’s a look at the eight S&P 500 stocks with the highest betas, according to Finviz.

1. Advanced Micro Devices, Inc. AMD, 3.09 beta.
2. United Rentals, Inc. URI, 2.71 beta.
3. Freeport-McMoRan Inc FCX, 2.51 beta.
4. Devon Energy Corp DVN, 2.38 beta.
5. Marathon Oil Corporation MRO, 2.31 beta.
6. SVB Financial Group SIVB, 2.19 beta.
7. IPG Photonics Corporation IPGP, 2.17 beta.
8. Navient Corp NAVI, 2.14 beta.

Benzinga’s Take

Several of these high-beta stocks have performed extremely well in 2019, including a 112% gain from AMD. However, these large positive returns from high-beta stocks occur much more often during periods of strong overall market returns, and traders can expect many of these same high-beta stocks to be among the worst performers during the next market downturn.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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