What are Volatile Stocks?
Most of you who are investing in the stock market must be knowing that the stock market is not that highly predictable. Sometimes, the stock prices soar high while sometimes it falls. When the price of stock keeps fluctuating and doesn’t remain stable then we can say that it is a volatile stock.
There can be further categories too in volatile stocks: low and high. Stocks having high volatility have a big difference in their highest price and lowest price while stocks having low volatility don’t have that big difference. Stocks having high volatility rise rapidly and fall quickly too, it is very unpredictable so very much risky to invest in.
So, if we put the definition of this term: volatility, we can say that it is the range of price change that a stock experiences over a period of time.
Those investors who have the courage to hold on the ride of the volatile stocks can earn a good return too but all that comes with experience and proper knowledge of the stock market.
There is one factor that gives an idea about the risk factor associated with a stock, it is called the Beta factor. Let us know about this factor to understand these stocks in a better way.
What is a Beta factor?
It is a factor that shows a stock’s volatility relative to the market. A stock’s beta will be less than 1 if it moves less than the market and it will be more than 1 if it moves more than the market.
If a stock has a high beta value then it is riskier but also provides opportunities for good return too while the one which has low beta value is considered less risky and also provides low returns.
Checking the beta value of a stock, one can get the idea of how much volatility or how much risk it is.
After understanding what these stocks are and knowing what is the beta value, let us now have a look at the high volatility stocks of the current market which can give you a good return if you take the risk of investing in them.
The first one on the list is CRC. California Resources Corporation is a company based in California, headquartered in Los Angeles that deals with the exploration and production of oil and gas.
This stock is very volatile. Earlier, it gained more than 50% in a day. For the people who like investing in risky stocks must go for this one as it can give a high return opportunity. The company has taken major steps for improving its balance sheet and due to this, it earned a great profit recently.
It has a beta of 2.8 so one can say that it is really a great ride if one likes and has the courage to take the risks.
ON Semiconductor is a Fortune 500 semiconductor manufacturing company. It deals with the varied electrical products required for different applications. The company had a difficult time recently and the stock prices had also fallen down.
As per the recent analysis, experts told that the business is stabilizing once again so good returns are expected from it. It has a beta value of 1.8 which makes it a risky but profitable stock.
Everyone must be familiar with this company and most of you must be using its service to commute from here and there. Recently, the company launched its IPO but the company is still struggling to do better in the stock market. The stock price is low and so people are refraining from investing in it.
Expert analysts are positive and say that the company is going to get a lot more profitable ahead so one should invest in it. Also, its beta value is 1.8 which suggests that the risks can be profitable.
Another oil and natural gas company operating in Texas are on our list. Laredo Petroleum operates in the Permian Basin and does the exploration and production of hydrocarbons.
Currently, the price of this stock was very low as it has been for the last 3 years due to the struggle faced by the oil market. The company is putting great efforts to get the stocks up and get a good impression of the portfolio so we can say that it will be a profitable option too. It has a beta value of 1.7.
So, here were the most volatile stocks of recent times. I hope you now have a clear idea of what volatility is and which are some of the riskiest stocks of the current times.
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