If The S&P 500 Falls, These 5 High-Beta US Stocks Will Likely Underperform

Which U.S. stocks currently have the highest beta relative to the S&P 500 index?

If the word "stock beta" is unfamiliar to you, don't panic - it's a lot simpler than it sounds. 

Beta is a volatility metric that helps investors determine the relative risk of a stock. 

When determining beta, the stock's movement is compared to the market's overall movement, which in most cases means the S&P 500. A beta of 1.0 suggests that a stock's volatility is comparable to that of the S&P 500. A beta value greater than 1.0 indicates that the stock's price movement has historically been more volatile than the market as a whole. A stock with a beta of 1.50, for instance, is 50% more volatile than the market.

When the market trend is firmly established, knowing a stock's beta is a valuable tool for traders. In bullish market phases, stocks with a beta greater than 1 tend to outperform the market, whereas in bearish market phases, these stocks tend to decline more than the market on average. 

The five highest beta equities with a market capitalization higher than $50 billion are listed below:

5) Lam Research Corp. LRCX

• Year-to-date price change: 23.3%
• Overperformance vs S&P 500: 18%
• 2-year weekly beta vs S&P 500: 1.81

4) Tesla, Inc. TSLA

• Year-to-date price change: 70%
• Overperformance vs S&P 500: 63%
• 2-year weekly beta vs S&P 500: 1.95

3) NVIDIA Corp. NVDA

• Year-to-date price change: 92%
• Overperformance vs S&P 500: 85%
• 2-year weekly beta vs S&P 500: 2.01

2) MercadoLibre, Inc. MELI

• Year-to-date price change: 51%
• Overperformance vs S&P 500: 42%
• 2-year weekly beta vs S&P 500: 2.13

1) Shopify, Inc. SHOP

• Year-to-date price change: 27%
• Overperformance vs S&P 500: 20%
• 2-year weekly beta vs S&P 500: 2.66
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