Highly Volatile Stocks in India: What Are Their Merits And Demerits?
Highly Volatile Stocks in India: An Overview
The entire share market sees a fluctuating trend of bullish and bearish, but there are some highly volatile stocks that are subject to frequent fluctuation as compared to the entire market. Stockbrokers or investors are constantly searching for these highly volatile stocks in India, as they have the potential to provide the best returns with significant price movements.
What is the meaning of volatility in the stock market?
In statistics, we have studied volatility as a statistical measure that indicates the deviation through standard deviation or variance. In the same way, volatility in the stock market indicates the movements of a stock's price from its original value or the movement as compared to its index. This volatility can happen every minute or second.
Volatile stocks are different for different traders. The high volatile stocks for intraday can be considered as the difference between the high and low prices in a day. For some traders, it is the highest volume traded and for others, it can be mathematical models and complex calculations on the basis of historical data.
Most Volatile Stocks in India: How To Identify Them?
There are various factors to identify the highly fluctuating shares which are subject to change fastly. Beta is one such factor that can measure the stock volatility as compared to its index. There is an index of the most volatile stocks nse (Nifty High Beta 50) that tracks these shares and compares the same with the benchmark index. The high risk-return ratio is the most important feature of high-fluctuating shares.
Beta measures the systematic risk or the volatility a stock has which cannot be diversified. This risk has to be borne by the trader. Therefore, chances of earning high returns also come with this risk. As prices fluctuate fastly, the chances of earning a return on the best volatile stocks for intraday is higher. When beta is equal to 1, it means that it performs in the same manner as its benchmark index. When the beta is less than 1, it means that the stock will show less fluctuation as compared to its benchmark index. But when the beta is greater than 1, a stock will show greater fluctuations than its benchmark index. Any minor change in the index or the market will hugely impact these stocks. When stock volatility rises, there is an opportunity to earn above-average returns. This increases both the demand and supply of these shares in a day and increases the volume traded in a day.
Merits and Demerits of Investing in Volatile Stocks
- As these stocks show large fluctuations, there is an opportunity to earn higher profits even if the benchmark index moves slightly upwards.
- As these stocks are generally of mid-cap and small-cap companies, they can be available at lower costs.
- Everybody wants to invest in safe investments as people, in general, are risk-averse, therefore the demand for highly volatile stocks in India in the long term is much less as compared to any blue chip stocks.
- The market value of these stocks is relatively lower because they are generally small-cap stocks and are undervalued from their intrinsic value.
- As for these stocks, volatile conditions show that they will outperform in a situation when there is inflation in the economy. It will hedge the investor against inflation and lead to a significant rise in the purchasing power of the investor.
- As the beta of these stocks is greater than 1 with the feature of outperforming it also leads to a situation when the benchmark index falls by a smaller percentage but that single stock will poorly drop from its value. With the advantage of earning upside potential, there is also a high risk of a downside fall.
- The investor will only take into account unsystematic risks such as stock market conditions and the state of an economy. But there is a situation of ‘value trap’ which means even if the benchmark index or stock market rises then also these highly volatile stocks will fall drastically in its value because of the poor faulty management of a business or failure to meet production targets.
Highly Volatile Stocks in India
Here is the list of the most volatile stocks today with a beta greater than one as of 30th November 2022.
|S. No.||Company Name||Industry||Beta||Market Capitalization (in ₹ crores)||Current Market Price (in ₹)||Volume|
|1.||Sabar Flex India Limited||Packaging||2.33||25||17.00||10,000|
|2.||Zomato Limited||E-Retail/ E-Commerce||1.60||54,346||63.65||379,150,027|
|3.||Tarmat Limited||Civil Construction||1.54||109||58.70||657,364|
|4.||IDFC First Bank Limited||Private Sector Bank||1.44||36,218||58.10||7,705,617|
|5.||Poonawalla Fincorp Limited||Non-Banking Financial Companies (NBFC)||1.39||23,730||310.35||739,546|
|6.||Steel Authority of India Limited||Iron & Steel||1.37||34,840||84.30||12,358,343|
|7.||QMS Medical Allied Services Limited||Medical Equipment & Supplies||1.35||392||219.95||91,000|
|8.||Bannari Amman Spinning Mills Limited||Textiles & Apparels||1.34||342||52.75||567,385|
|9.||Bharat Heavy Electricals Limited||Heavy Electrical Equipment||1.32||28,883||82.95||17,503,403|
|10.||NBCC (India) Limited||Engineering Designing & Construction||1.30||7,776||43.25||11,985,156|
|11.||Aditya Birla Capital Limited||Life Insurance||1.29||35,068||145.10||4,673,433|
|12.||KBC Global Limited||Residential Commercial Projects||1.29||187||3.05||2,246,689|
|13.||CMM Infraprojects Limited||Engineering Designing & Construction||1.29||13||8.55||27,000|
|14.||Punjab National Bank||Public Sector Bank||1.28||57,202||51.90||28,221,492|
|15.||K.M. Sugar Mills Limited||Sugar||1.28||240||26.15||46,487|
|16.||Tata Steel Limited||Iron & Steel||1.26||131,045||107.20||19,341,009|
|17.||Jubilant Industries Limited||Specialty Chemicals||1.24||647||430.00||626|
|18.||Vodafone Idea Limited||Telecom - Cellular & Fixed line services||1.21||26,016||8.10||14,646,462|
|19.||Union Bank of India||Public Sector Bank||1.19||55,532||81.20||13,050,100|
|20.||Take Solutions Limited||Healthcare Research Analytics & Technology||1.19||352||23.80||97,591|
|21.||Dish TV India Limited||TV Broadcasting & Software Production||1.18||3,912||21.25||10,464,376|
|22.||Jaiprakash Power Ventures Limited||Electric Utilities||1.15||5,242||7.65||17,251,921|
|23.||Hindustan Construction Company Limited||Engineering Designing & Construction||1.14||2,625||17.40||8,045,439|
|24.||GVK Power & Infrastructure Limited||Engineering Designing & Construction||1.13||473||3.00||178,943|
|25.||Bandhan Bank Limited||Private Sector Bank||1.11||38,031||236.10||10,564,848|
|26.||IDBI Bank Limited||Private Sector Bank||1.11||57,041||53.05||11,740,636|
|27.||Mohini Health & Hygiene Limited||Medical Equipment & Supplies||1.11||98||54.00||18,000|
|28.||Precision Metaliks Limited||Auto Components & Equipment||1.08||68||42.00||18,000|
|29.||Krishna Defence And Allied Industries Limited||Aerospace & Defense||1.06||132||116.00||39,000|
|30.||Suzlon Energy Limited||Heavy Electrical Equipment||1.01||10,258||9.10||56,172,313|
(Data as of 30th November 2022)
Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns
As these stocks are considered to be high-volatility stocks today, this list is not exhaustive because they change in every minute or second as the market changes. Hence, they can be selected for intraday trading or for a short period. Individuals having a high-risk appetite can invest in the highly volatile stocks in India because there is also a potential to earn very high upside rewards. They can invest in these stocks with the motive of wealth accumulation in the long run. However, it is essential to keep an eye on these stocks and do proper due diligence and analysis of the company to reduce the risk involved in it.
This is not an investment advisory. The blog is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs. The performance and returns of any investment portfolio can neither be predicted nor guaranteed.
Which is the most volatile stock in India?
The most volatile stocks in India are the stocks that have a beta greater than 1 or whose price fluctuates fastly with high volume traded in a day.
Is it good to buy volatile stocks?
Yes, it is good to buy volatile stocks because they hedge against inflation and price movements just like derivatives.
How do I select volatile stocks for intraday?
To select the volatile stocks in India for intraday purposes, one can check the volume traded for a particular stock or check today’s low and highest price of the stock.
Which is the most stable stock in India?
The most stable stocks in India are Reliance Industries Limited and Tata Consultancy Services Limited, etc. which are considered to be blue-chip stocks and provide assured returns as compared to the highly volatile stocks in India which are very risky.