The entire stock market witnesses fluctuation due to the bearish and bullish trends. The significance of stock market volatility lies in its ability to both captivate and intimidate investors. However, there are some high volatile stocks that are subjected to fluctuations for the entire period. While some may shy away from its unpredictable nature, others embrace it as an opportunity for high-risk, high-reward investments.
In this blog, we will delve into the realm of high volatile stocks, explore potential risks, and much more. Let’s begin.
What is the Meaning of Volatility in the Stock Market?
In the stock market, volatility refers to the degree of fluctuation or variability in the price of a particular security or market over a specific period. Volatility is an essential concept for investors and traders as it influences their risk appetite, trading strategies, and potential returns.
It is the difference between a stock’s price (also called a mean price) and its original price (also called volatility) that determines whether it is volatile or not. For instance, let’s imagine it as a pendulum. So, the more the pendulum oscillates from its mean position, the more likely it is said to be more volatile.
Volatility of a stock is typically calculated using statistical measures such as standard deviation or variance, which analyze historical price movements. A high volatile stocks meaning exhibits wide price swings and is more prone to sudden and significant changes, while a low-volatility stock experiences more stable and predictable price movements.
Thus, you can observe the most volatile stocks in Nifty 50 as well.
How to Identify Best Volatile Stocks?
Identifying highly volatile stocks NSE or finding out which stock is more volatile requires a systematic approach that incorporates various measures specifically designed to gauge volatility. One such factor is Beta. It can be used to measure the stock’s volatility in comparison with its index.
Nifty High Beta 50 is an index that tracks the most volatile Indian stocks and compares them with the benchmark index. Therefore, as prices fluctuate fastly, the chances of earning a return on the high volatile stocks for intraday is higher.
Now, you may ask ‘How can we measure Beta?’ Well, that’s quite simple. If the Beta is greater than 1, then it is highly volatile; however, if it is equivalent to 1 then it means the performance is equal to the benchmark index. Additionally, if the Beta is less than 1, it means that the stock will show less fluctuation as compared to its benchmark index.
Hence, when you are looking at the high volatile stocks in NSE, Beta is an important indicator to consider.
List of Most Volatile Stocks NSE 2024
Let’s have a look at the highly volatile shares NSE to understand the concept better.
|Market Cap (in Cr)
|Adani Enterprises Ltd
|Trading Companies & Distributors
|Brightcom Group Ltd
|Rail Vikas Nigam Ltd
|Diversified Financial Services
|Suzlon Energy Ltd
|Semiconductors & Semiconductor Equipment
|Adani Transmission Ltd
Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data in the list of volatile stocks is from 23rd January, 2024. However, for real-time updates on stock prices and market trends, visit smallcase stocks collection today!
Why Do People Invest in High Volatile Stocks?
Investing in highly volatile stocks is a strategy driven by various factors. Firstly, some investors are drawn to the potential for rapid and significant price movements, as this volatility can present opportunities for quick profits. Additionally, day traders often leverage volatility for short-term gains, capitalizing on price fluctuations within a single trading day.
Furthermore, certain investors see volatile stocks as a means to diversify their portfolios, introducing an element of risk that may contribute to higher returns over the long term. High volatility can also be a reflection of a company’s growth potential or involvement in emerging sectors, attracting risk-tolerant investors seeking exposure to groundbreaking opportunities.
It’s essential to note that while some investors are attracted to volatility, it comes with inherent risks. Market fluctuations can lead to substantial losses, and thorough research and risk assessment are crucial before considering investment in the most volatile stocks. Understanding the reasons behind such investments provides valuable insights for those navigating the dynamic landscape of the stock market.
Overview of the Most Volatile Stocks in India for 2024
Here is a brief overview of the top volatile stocks listed above:
Adani Enterprises Ltd
Adani Enterprises (NSE) generated an impressive operating revenue of Rs. 105,914.06 Cr. over the last 12 months, showcasing a remarkable annual growth of 96%. However, there is room for enhancement in the pre-tax margin, currently standing at 2%, and the ROE, which is fair but could be improved at 7%.
Brightcom Group Ltd
Brightcom Group’s trailing 12-month operating revenue stands at Rs. 7,606.48 Cr, showcasing an impressive annual growth of 47%. The pre-tax margin hits an excellent 26%, while the return on equity (ROE) is an exceptional 19%.
Rail Vikas Nigam Ltd
Rail Vikas Nigam generated Rs. 21,217.81 Cr. in revenue over the last 12 months. While a 5% annual revenue growth is moderate, an 8% pre-tax margin is satisfactory, and the exceptional 19% return on equity (ROE) reflects strong financial performance.
Suzlon Energy Ltd
Suzlon Energy (NSE) generated Rs. 5,924.51 Cr. in operating revenue over the past 12 months. Although facing a 9% annual revenue decline, the impressive 48% pre-tax margin and exceptional 259% return on equity (ROE) stand out.
Adani Transmission Ltd
Adani Transmission Limited is engaged in engineering, construction management / operation and maintenance business. The Company’s businesses include engineering, procurement and construction (EPC) and Utilities.
Uco Bank (Nse) generated an operating revenue of Rs. 23,120.09 Cr. in the last 12 months. While the 11% annual revenue growth is commendable, the 9% pre-tax margin is acceptable, and the 8% ROE indicates room for improvement.
How to Invest in Most Volatile Stocks in India?
Investing in the most volatile stocks in India requires a strategic approach to manage risks and potential returns effectively. Here are key steps to consider:
- Thorough Research: Before diving in, conduct comprehensive research on the specific stocks. Analyze historical price movements, financial reports, and the factors influencing volatility.
- Risk Tolerance Assessment: Evaluate your risk tolerance level. Volatile stocks can experience sudden price fluctuations, and it’s crucial to align your investment strategy with your risk comfort.
- Diversification: Spread your investments across different volatile stocks to minimize the impact of a single stock’s performance on your portfolio. Diversification can be a risk management tool.
- Stay Informed: Keep abreast of market news, economic indicators, and industry trends. Volatility often stems from external factors, and staying informed helps you make informed decisions.
- Set Clear Goals: Define your investment goals and timeframe. Are you looking for short-term gains or long-term growth? Having clear objectives will guide your investment strategy.
- Utilize Stop-Loss Orders: Implementing stop-loss orders can help limit potential losses. Set predefined exit points to automatically sell a stock if it experiences a significant downturn.
What are the Factors to Consider Before Investing in High Volatile Stocks?
Investing in these high volatile stocks can potentially offer high returns, but it also comes with increased risk. Therefore, before investing in such stocks, it’s important to carefully consider a few factors. Here are some key factors to take into account:
- Risk Tolerance: High volatile stocks in Nifty 50 for intraday trading can experience significant price swings, which can be unsettling for some investors.
- Investment Timeframe: High volatile stocks can be suitable for short-term traders looking to take advantage of price fluctuations.
- Fundamental Analysis: Look at financial statements, earnings reports, cash flow, and debt levels. A high volatile stock may indicate a higher level of uncertainty, so it’s crucial to understand the company’s fundamentals.
- Market Conditions: Consider whether the market is experiencing high levels of volatility or if there are any specific events or factors that could impact the stock’s performance.
- Diversification: Consider how the highly volatile stocks in Nifty 50 fits into your overall investment strategy. Avoid concentrating on a single high volatile stock.
- Risk Management: Determine your entry and exit points, set stop-loss orders to limit potential losses, and establish a risk-reward ratio that aligns with your investment goals.
- Research and analysis: Utilize tools and resources that can assist in analyzing high volatile stock’s historical performance and volatility patterns.
Features of the Most Volatile Stocks to Invest in India in 2024
When considering investments in highly volatile stocks in India for 2024, understanding their distinctive features is crucial for informed decision-making.
- Market Sensitivity: The most volatile stocks in NSE are often highly sensitive to market trends, reacting swiftly to economic shifts, geopolitical events, and industry developments.
- Beta Values: A high beta value indicates greater volatility, reflecting the high volatile share’s tendency to amplify market movements. Investors should assess this metric for insights into potential price fluctuations.
- Earnings Volatility: Stocks with erratic earnings patterns tend to be more volatile. Analyzing historical earnings data provides a glimpse into the financial stability and risk associated with a particular stock.
- Industry Dynamics: Volatility can be influenced by industry-specific factors. Sectors prone to rapid changes, regulatory shifts, or technological advancements may host high volatile stocks for intraday NSE with higher volatility.
- Liquidity Levels: Low liquidity can amplify price swings. Stocks with lower trading volumes may experience sharper and more unpredictable price movements.
What are the Advantages & Disadvantages of the Most Fluctuating Stocks?
Fluctuating stocks are those whose prices fluctuate more than the overall market. This can be due to a variety of factors, such as the company’s financial performance, news about the company, or broader economic conditions.
There are both advantages and disadvantages to investing in high volatile stocks NSE.
- Potential for High Returns: High volatile stocks can offer the potential for high returns, especially over the long term. This is because they are often priced more cheaply than less volatile stocks.
- Opportunities for Traders: Traders can buy and sell highly fluctuating stocks quickly to profit from small changes in price.
- Access to New Industries: High volatility stocks can give investors access to new industries that are not yet well-established.
- High Risk: High volatility stocks are also more risky than less volatile stocks. This is because their prices can fluctuate more wildly, which can lead to large losses.
- Unpredictability: It can be difficult to predict how volatile stocks will perform in the short term. This can make it difficult to time your trades and to make profits.
- Lack of Liquidity: High volatile stocks may not be as liquid as less volatile stocks. This means that it can be difficult to buy and sell them quickly, which can make it difficult to exit a position if the stock price falls.
Tips For Investors While Investing in High Volatile Stocks
Here are some tips to consider while investing in high volatile stocks:
- One strategy investors employ to deal with high volatile stocks is to stay invested and ignore short-term movements. Implementing this can be harder than it sounds as during a bear market, one’s portfolio can show a loss of 50% or even more.
- Traders also need to avoid the misconception about the buy-and-hold strategy. To make a successful long-term investment, one must understand how corporate fundamentals drive the markets.
While one can find a number of advises on how to deal with stock market volatility, investors need to be aware of certain things. They are:
- High volumes of trading often cause delays in the execution of orders on volatile markets. In such situations, orders of high volatility stocks may be executed at prices different from market quotes.
- Traders may also encounter slight difficulties executing their trades due to system limitations. It is possible to have difficulty accessing one’s account when trading online, so alternative methods, such as calling or faxing your broker, should be considered.
- Investors need to be careful about their orders when the markets are not moving in the direction predicted or not in their usual way. With limited orders, investors can reduce losses caused by incorrect quotes when placing orders.
As always, investors must do their own research and/or consult their financial advisor before investing.
To Wrap It Up…
To conclude, high volatile stocks or the most fluctuating stocks NSE can be a good investment for investors who are willing to take on high risk in exchange for the potential for high returns. Therefore, it is highly advisable to conduct thorough research and consult a financial advisor before moving ahead.
Stock volatility measures how much a stock’s price changes over time. Increased volatility suggests greater risk, aiding investors in predicting potential future fluctuations.
The most volatile stocks for intraday trading in india are:
1. Hindustan Aeronautics Ltd
2. Interglobe Aviation Ltd
3. United Spirits Ltd
Note: This information is provided for educational purposes and is not intended as a recommendation or endorsement.
Market volatility isn’t necessarily negative; it can create opportunities for investors. During downward market swings, those with a positive long-term outlook can purchase more volatile shares in favored companies at reduced prices.
High market fluctuations create opportunities for investors to profit, especially when the benchmark index shows even slight upward movement. Typically, volatile stocks, often mid-cap and small-cap, can be found at lower costs.
Discovering highly volatile stocks involves paying attention to Beta, a crucial indicator measuring a stock’s volatility compared to the overall market. A Beta exceeding 1 indicates greater volatility than the market, typically associated with higher risk.