How to Construct a Screen for Volatile Stocks

by Bryan Keythman, studioD

Volatility measures the magnitude of a stock’s price movements. A stock with high volatility may have greater price swings in a shorter time period than a stock with low volatility. Although a volatile stock’s price can rise quickly, it can also fall quickly, which creates added risk to investors and traders. An online stock screener allows you to search for stocks based on certain criteria that you specify. The primary measure of volatility that is available through online stock screeners is beta, which measures a stock’s volatility relative to the overall stock market.

Visit any financial website that provides an online stock screener.

Find the beta filter in the screener’s search criteria.

Adjust the minimum setting on the beta filter to a number that is greater than 1. This will generate a list of stocks with a beta that is equal to or greater than the number you select. A higher beta represents greater volatility. A stock with a beta greater than 1 is more volatile than the S&P 500, which represents the overall stock market. A beta of 1 means a stock is equally as volatile as the market. A beta of less than 1 means a stock is less volatile than the market.

Adjust the minimum beta setting to 1.5 for this example. Click the button on the stock screener to search for stocks. This brings up a list of stocks in rows and columns based on your search criteria. Each row contains one stock. Each column lists an attribute of the stock, such as the company’s name, the stock’s ticker symbol and the stock’s beta.

Click on the word “beta” at the top of the beta column to sort the list based on each stock’s beta. Click it until the list shows the stock with the highest beta on top and the stock with the lowest beta on bottom. This list shows you the most volatile stocks.

About the Author

Bryan Keythman has performed stock investment research and writing for a consulting firm since 2008. He also has prior experience sourcing and underwriting commercial real-estate investment and development opportunities for a commercial real-estate developer. Keythman holds a Bachelor of Science in finance.

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