Low Beta Stocks

Beta is the result of a calculation that measures the relative volatility of a stock in correlation to a particular standard. For U.S. stocks that standard is usually, but not always, the S&P 500. Beta is a form of regression analysis and it can be useful for investors regardless of their risk tolerance. Beta is considered one of the few data points that can be beneficial for practitioners of fundamental analysis and technical analysis. This page lists stocks that have unusually low beta calculations, meaning there is little correlation between the price moves of these stocks and the S&P 500. Learn more.

Company	Beta	PE Ratio	Market Cap	Current Price	Price Change	Volume	Average Volume	Indicator(s)
EIG Employers	0.01	6.83	$1.17 billion	$41.06	-3.8%	216,325	179,065
MDOMF Mandom	0.02	35.58	$1.19 billion	$24.55	flat	0	N/A	Upcoming Earnings High Trading Volume Increase in Short Interest News Coverage
AWR American States Water	0.03	32.47	$2.96 billion	$80.21	flat	278,508	188,835	Gap Up
UNICY Unicharm	0.04	61.31	$23.67 billion	$7.97	flat	93,605	192,441	Upcoming Earnings
GCMG GCM Grosvenor	0.05	21.33	$1.95 billion	$10.45	flat	3.41 million	584,588	Analyst Revision News Coverage Gap Down
PAYA Paya	0.05	22.63	$1.38 billion	$10.86	flat	1.67 million	1.29 million
CHT Chunghwa Telecom	0.06	27.05	$31.68 billion	$40.84	flat	431,578	96,547	High Trading Volume News Coverage
IHICY IHI	0.07	28.48	$3.69 billion	$5.98	flat	5	1,525	Analyst Upgrade
FFG FBL Financial Group	0.08	14.59	$1.49 billion	$60.99	+0.0%	2,426	69,961
KDDIY KDDI	0.08	11.60	$72.17 billion	$15.66	flat	85,411	118,352	Upcoming Earnings Decrease in Short Interest News Coverage
PSA Public Storage	0.08	44.53	$52.21 billion	$298.36	flat	2.01 million	782,737	High Trading Volume Analyst Revision
ATRI Atrion	0.09	35.57	$1.10 billion	$600.00	flat	15,639	7,395	High Trading Volume News Coverage Gap Up
WMK Weis Markets	0.09	11.84	$1.38 billion	$51.25	flat	186,851	106,211	News Coverage
DLR Digital Realty Trust	0.09	100.13	$43.42 billion	$154.20	flat	4.17 million	1.56 million	Insider Selling High Trading Volume
CWT California Water Service Group	0.10	24.37	$2.85 billion	$56.06	flat	380,331	211,215	News Coverage Gap Up
ARKO Arko	0.13	68.00	$1.18 billion	$9.52	flat	984,710	537,734	Decrease in Short Interest Gap Up
COG Cabot Oil & Gas	0.13	19.91	$6.12 billion	$15.33	flat	14.82 million	7.50 million	Analyst Report Gap Up
IIJIY Internet Initiative Japan	0.13	56.99	$2.72 billion	$29.06	flat	106	1,792	Upcoming Earnings Decrease in Short Interest
CCOI Cogent Communications	0.14	227.80	$3.68 billion	$77.45	flat	511,804	308,969
FUJIY FUJIFILM	0.14	16.55	$29.00 billion	$70.84	flat	32,413	13,649	High Trading Volume Decrease in Short Interest
CTXS Citrix Systems	0.15	35.31	$14.38 billion	$115.81	flat	2.07 million	1.26 million
SWX Southwest Gas	0.15	13.03	$3.67 billion	$63.19	flat	820,160	481,578	Gap Up
ED Consolidated Edison	0.16	21.97	$25.55 billion	$74.49	flat	3.83 million	2.44 million	Gap Up
LANC Lancaster Colony	0.17	37.35	$5.27 billion	$191.24	flat	147,169	92,176	Analyst Report News Coverage
SCMWY Swisscom	0.17	15.44	$29.75 billion	$57.43	flat	4,903	11,849
NEE NextEra Energy	0.17	34.69	$143.73 billion	$73.28	flat	17.54 million	8.64 million	Insider Selling High Trading Volume
EXR Extra Space Storage	0.17	36.23	$21.32 billion	$159.41	flat	1.36 million	774,919	Analyst Report Analyst Revision News Coverage
JBSS John B. Sanfilippo & Son	0.18	17.90	$1.02 billion	$89.32	flat	75,782	45,298	News Coverage Gap Up
NASB NASB Financial	0.18	3.85	$510.74 million	$69.00	flat	1,049	520	High Trading Volume News Coverage
CMS CMS Energy	0.18	19.37	$16.82 billion	$58.12	flat	3.12 million	2.15 million
WEC WEC Energy Group	0.18	22.53	$28.21 billion	$89.43	flat	2.00 million	1.32 million	Decrease in Short Interest Gap Up
EQC Equity Commonwealth	0.19	390.48	$3.33 billion	$27.33	flat	1.54 million	957,524	News Coverage
SOHVY Sumitomo Heavy Industries	0.19	13.93	$3.55 billion	$7.24	flat	0	3	Analyst Upgrade
SBAC SBA Communications	0.20	258.89	$34.82 billion	$318.44	flat	982,267	721,974	Unusual Options Activity News Coverage
CLX The Clorox	0.20	24.13	$21.51 billion	$172.98	flat	2.75 million	1.60 million
REGN Regeneron Pharmaceuticals	0.20	15.23	$57.31 billion	$537.92	flat	914,787	921,619
SVNDY Seven & i	0.20	23.53	$39.54 billion	$22.35	flat	30,239	48,556
SSMXY Sysmex	0.20	71.95	$22.61 billion	$53.97	flat	19,120	23,088
YORW The York Water	0.21	38.10	$617.57 million	$47.24	flat	103,809	34,819	High Trading Volume News Coverage Gap Up
AWK American Water Works	0.21	39.78	$28.59 billion	$157.54	flat	1.74 million	967,149	Decrease in Short Interest Gap Up
REMYY Rémy Cointreau	0.21	61.61	$10.07 billion	$20.33	+2.0%	6,058	10,340	Gap Up
AMFPF Amplifon	0.21	66.43	$10.53 billion	$46.50	flat	900	57	High Trading Volume Decrease in Short Interest
AGR Avangrid	0.22	23.50	$15.85 billion	$51.24	flat	1.64 million	578,823	High Trading Volume Gap Up
NTTYY Nippon Telegraph and Telephone	0.22	11.18	$98.39 billion	$26.16	flat	97,368	132,355	Increase in Short Interest
ZTO ZTO Express (Cayman)	0.23	34.84	$17.96 billion	$28.92	flat	20.50 million	3.73 million	High Trading Volume News Coverage Gap Up
OMI Owens & Minor	0.23	28.19	$3.28 billion	$43.70	flat	1.95 million	1.29 million
HE Hawaiian Electric Industries	0.23	20.07	$4.58 billion	$41.94	flat	684,105	579,275	Decrease in Short Interest Gap Up
FNLPF Fresnillo	0.23	26.36	$8.55 billion	$11.60	flat	19,438	19,030	Upcoming Earnings News Coverage
COR CoreSite Realty	0.23	66.65	$5.70 billion	$132.64	flat	3.44 million	386,763	High Trading Volume
AMT American Tower	0.23	61.70	$120.68 billion	$265.94	flat	2.77 million	2.11 million	Unusual Options Activity
STFC State Auto Financial	0.24	5.66	$729.94 million	$16.57	flat	71,223	49,741	Gap Up
FE FirstEnergy	0.24	14.97	$20.20 billion	$37.13	flat	6.19 million	4.02 million
PINC Premier	0.24	18.40	$4.19 billion	$34.23	flat	1.04 million	528,907
NHC National HealthCare	0.24	11.76	$1.06 billion	$68.81	flat	132,373	34,274	High Trading Volume Increase in Short Interest News Coverage Gap Up
LLY Eli Lilly and	0.24	32.67	$209.59 billion	$218.55	flat	4.02 million	3.96 million	Analyst Report
TKAGY Telekom Austria	0.25	13.78	$5.95 billion	$17.92	flat	0	357	Upcoming Earnings
FTS Fortis	0.25	22.51	$21.34 billion	$45.46	flat	483,190	393,451	Decrease in Short Interest News Coverage
MONOY MonotaRO	0.25	83.57	$11.73 billion	$23.40	flat	6,289	16,054
CUBE CubeSmart	0.25	52.69	$9.24 billion	$45.84	flat	1.45 million	1.08 million	Analyst Revision
QGEN QIAGEN	0.25	24.54	$10.74 billion	$47.12	flat	837,487	802,532	Analyst Report Unusual Options Activity News Coverage
AEE Ameren	0.25	21.49	$20.98 billion	$82.11	flat	2.96 million	1.55 million	Analyst Downgrade News Coverage
DUK Duke Energy	0.25	57.25	$76.62 billion	$99.61	flat	5.19 million	3.31 million	News Coverage Gap Up
SFM Sprouts Farmers Market	0.26	11.68	$3.26 billion	$27.57	flat	2.82 million	2.52 million
PHI PLDT	0.26	11.85	$5.73 billion	$26.55	flat	562,278	103,451	High Trading Volume
AEP American Electric Power	0.26	17.90	$41.15 billion	$82.35	flat	4.48 million	3.03 million	Gap Up
MSEX Middlesex Water	0.26	39.56	$1.47 billion	$84.26	flat	202,312	120,279	Gap Up
CSUAY China Shenhua Energy	0.27	8.33	$43.06 billion	$8.66	flat	25,304	61,030	Upcoming Earnings News Coverage
NEM Newmont	0.27	19.63	$50.17 billion	$62.62	flat	17.02 million	7.12 million	High Trading Volume
IIPZF InterRent Real Estate Investment Trust	0.27	10.83	$1.80 billion	$12.99	flat	0	195
LUXTY Luxottica Group	0.27	24.37	$27.07 billion	$55.80	+0.4%	2,900	14,259	News Coverage Gap Down
MITK Mitek Systems	0.28	86.37	$818.03 million	$19.00	flat	685,520	690,876	Analyst Upgrade
FLO Flowers Foods	0.28	21.97	$5.02 billion	$23.73	flat	1.89 million	1.11 million	Unusual Options Activity Gap Up
EQIX Equinix	0.28	180.04	$73.70 billion	$822.77	flat	3.75 million	557,778	Analyst Report High Trading Volume News Coverage
SR Spire	0.28	25.18	$3.75 billion	$72.52	flat	421,844	316,790	Insider Selling Gap Up
CLPBY Coloplast A/S	0.28	57.21	$34.60 billion	$16.02	flat	56,900	102,603
AUCOY Polymetal International	0.28	9.87	$10.51 billion	$22.20	flat	2,740	6,998
ORAN Orange	0.29	6.06	$31.42 billion	$11.82	flat	1.44 million	655,296	High Trading Volume
XEL Xcel Energy	0.29	23.05	$35.84 billion	$66.60	flat	4.43 million	2.95 million	Insider Selling Decrease in Short Interest Gap Up
GOLD Barrick Gold	0.29	14.93	$36.90 billion	$20.75	flat	30.23 million	18.64 million	Increase in Short Interest News Coverage
ES Eversource Energy	0.29	22.14	$27.45 billion	$79.92	flat	4.13 million	1.56 million	High Trading Volume News Coverage Gap Up
PORBF POLA Orbis	0.29	86.43	$4.40 billion	$19.88	flat	0	N/A	Upcoming Earnings High Trading Volume
RMD ResMed	0.29	75.86	$34.55 billion	$237.44	flat	1.25 million	655,884	Analyst Report Unusual Options Activity
RCDTF Recordati Industria Chimica e Farmaceutica	0.29	27.40	$11.76 billion	$57.00	flat	9,000	34	Upcoming Earnings High Trading Volume Increase in Short Interest Analyst Revision News Coverage
HSTM HealthStream	0.30	89.14	$815.65 million	$25.85	flat	120,952	110,864	News Coverage
SAFT Safety Insurance Group	0.30	6.72	$1.18 billion	$78.68	flat	153,045	72,649	High Trading Volume
PNW Pinnacle West Capital	0.30	16.44	$9.14 billion	$81.05	flat	2.58 million	891,675	High Trading Volume Gap Up
ORKLY Orkla ASA	0.30	19.96	$10.18 billion	$10.18	flat	15,034	23,479	Increase in Short Interest
SOMLY Secom	0.30	20.65	$17.73 billion	$19.00	flat	40,677	24,404
WWLNF Worldline	0.30	41.07	$11.00 billion	$82.56	flat	0	11	Upcoming Earnings
CPAC Cementos Pacasmayo S.A.A.	0.31	30.80	$652.76 million	$7.70	flat	189,991	13,636	Dividend Increase Decrease in Short Interest News Coverage Gap Up
EXPO Exponent	0.31	52.48	$4.49 billion	$86.06	flat	423,333	205,765	High Trading Volume Gap Up
NI NiSource	0.31	69.50	$9.81 billion	$25.02	flat	5.02 million	3.94 million	Gap Up
ADC Agree Realty	0.31	39.51	$4.47 billion	$69.54	flat	1.10 million	734,775	Dividend Announcement
OBYCF Obayashi	0.31	6.97	$6.70 billion	$9.34	flat	1,800	N/A	Upcoming Earnings High Trading Volume Increase in Short Interest
SMNNY Shimano	0.31	34.88	$21.02 billion	$22.67	flat	50,637	55,271	Upcoming Earnings News Coverage Gap Up
ADRNY Koninklijke Ahold Delhaize	0.31	20.64	$30.47 billion	$29.11	flat	35,165	109,763
DWHHF Deutsche Wohnen	0.31	18.33	$22.55 billion	$62.70	flat	105	1,069	Upcoming Earnings Analyst Downgrade
LEGIF LEG Immobilien	0.31	9.60	$10.96 billion	$148.50	flat	0	166	Upcoming Earnings
CFFN Capitol Federal Financial	0.32	21.20	$1.65 billion	$11.87	flat	1.25 million	546,696	Analyst Upgrade High Trading Volume Gap Up
OFLX Omega Flex	0.32	66.78	$1.46 billion	$144.25	flat	40,268	12,229	High Trading Volume News Coverage Gap Down

What Are Low Beta Stocks

Many retail investors assume that you can’t predict the stock market. And since you can’t predict it, they assume that investing in stocks carries a certain amount of risk. Well, as it turns out, there is a way to assess the risk of a particular security: it’s called beta. Low beta stocks are those securities that carry the lowest amount of risk.

How to Use Low Beta Stocks to Minimize Risk and Increase Returns

• What Is the Beta of a Stock?
• How to Calculate Beta
• Low Beta Strategy
• How to Reduce Risk in Your Portfolio
• Is It Smart to Invest in Low Beta Stocks?

Beta is essentially a measure of a stock’s volatility. Risk level is one of the most important stats to analyze in terms of investing in stocks. A comparison of a stock’s risk factor to your own level of risk tolerance will help you know whether to buy, sell, or avoid a certain security. Beta is the number that will help you understand a stock’s level of risk and make those decisions.

What Is the Beta of a Stock?

In the simplest terms, beta is a tool that compares how volatile a stock is in comparison to the overall market. The stock market is the “control” and has a definitive benchmark beta of 1.0, while each individual security is the “variable,” with a beta that varies in terms of how much the stock moves around.

A stock that is more volatile than the market has a beta of more than 1.0, while a stock that is less volatile than the market has a beta of less than 1.0. If you’re a short-term trader riding the market waves and looking at stock market gainers, stock beta can let you know which securities might be the riskiest—then you can decide whether or not to get involved.

As you can see from this explanation, risky stocks are not the only ones that carry risk. Every one of the individual stocks can be viewed as a risky stock to some degree, even if the degree is negligible. Even in bull markets, when it seems like the sky’s the limit forever, it’s impossible for a stock to mirror the benchmark.

How to Calculate Beta

The beta of a stock is calculated using regression analysis. In short, regression analysis is all about comparing one stable variable with other changing variables. The formula for calculating a stock’s beta is simple in theory—beta is found by dividing covariance by variance.

Covariance represents how similar or dissimilar two numbers are in their movements—in this case, a stock is being compared to the market. Positive numbers indicate that their movement is similar. Negative numbers indicate that their movements are different.

Variance represents how much the “control” variable bounces around in comparison to its mean—its normal state. To keep it short and sweet, a stock’s beta is calculated with the intention of assessing how similar or divergent a stock’s movement is in comparison to the market—and thereby determining its volatility. Beta, in turn, can be worked into a complex equation to create a Capital Asset Pricing Model (CAPM). This equation helps calculate the expected return of an asset, using its risk-free rate as a starting point (a hypothetical rate of return involving no risk).

Beyond beta, other formulas, such as the Sharpe Ratio—which uses standard deviation—can help investors determine how much additional yield they’ll get for every increase per unit of risk. Then there is tracking error, which helps investors understand how much performance has deviated from the intended benchmark.

As you can see, beta is the gateway stat for an in-depth, computational way of growing equity through leveraging statistical opportunities in the stock market. 

Low Beta Strategy

Low Beta Strategy focuses on investing in securities that have a low beta. These are stocks issued by companies in a sector like consumer goods, food, and utilities. This type of asset tends to avoid wild fluctuations because its line of business is both necessary and consistent. For example, utility companies exert a relative monopoly over their local region and face little competition in their sector.

Low Beta stocks are safer in terms of price when the market is down—they match the market, and don’t wildly plummet while the market is coasting. However, when the market is up, the same logic applies: these stocks gain less than some of their more volatile counterparts.

Some investment strategies actually involving investing in both low and high beta stocks simultaneously. Stocks with a higher beta—which can experience greater price fluctuations—can present opportunities for big gains through short-term trading of these volatility stocks. To offset potential losses, the investor will also buy into stocks with a lower beta and hold onto them for longer periods of time. This statistical arbitrage strategy is referred to as the bet against beta.

How to Reduce Risk in Your Portfolio

Unfortunately, beta is not a catchall indicator that can prevent losing your earnings to risky investments. While beta is a mathematical measure of how volatile a stock is in comparison to the market, it says nothing about other factors, like how a company operates, its debt, or current events that can affect its operations—such as its potential in regard to future earnings.

For example, a company in a stable industry like utilities can be poorly run, on the brink of bankruptcy, and facing a cataclysmic shutdown due to a recent energy-related event—but because it’s historically moved in close tandem with the overall market, it’s beta is low. Doesn’t sound like a good investment, does it?

One way to reduce risk in your portfolio is to diversify your investments. In terms of stocks, this can mean diversifying your portfolio through a range of companies and industries. However, if you want to truly minimize risk, the majority of your portfolio should be invested in stable, established, non-speculative securities, and preferably ones that pay good dividends or offer opportunities for growth.

One of the easiest ways to avoid risk is to invest in mutual funds or ETFs. This type of fund pools money from a number of investors. With a larger amount of money to play with, mutual fund managers can spread it out over a broader range of securities than each individual investor would be able to buy on their own. You can also diversify risk by investing in different types of asset classes. Between stocks, bonds, commodities, real estate, and business ownership, there are a number of vehicles for producing cash flow. A capital asset like a paid-off rental property can even produce free cash flow, unencumbered by expenses (this is every investor’s golden egg).

If your money is diversified, when one of your investments takes a hit, you won’t have to lose all your eggs—you’ve placed them in different baskets. While much ink has been spilled about which type of asset can consistently outperform the others in terms of growth, everyone can agree that at different times one asset outperforms the others; they all carry a degree of historical volatility (even real estate). 

If you do want to pick out which stock comprises your portfolio, another strategy for reducing risk is to invest in established, stable companies—but these companies are stable beyond their beta score. Large blue-chip companies, like those you’ll find in Warren Buffet’s portfolio, have been around for decades. They are well run, well-financed, and have low amounts of debt. Beta says nothing about the degree of competence with which a company is run, although competently-run, long-standing companies usually do have a lower beta score.

Even if you’re trying to avoid too much risk, most financiers would agree that it’s okay to take a small percentage of your portfolio (financial experts such as Benjamin Graham have suggested no more than 5%) and look at cheap stocks to buy. These stocks might be riskier, but they can also provide good returns if they work out. If they don’t, your losses will be marginal.

Is It Smart to Invest in Low Beta Stocks?

While beta is used to analyze risk, it does have some shortcomings. As mentioned, beta is a comparative statistic that says nothing about how a company is run. It’s been described by analysts as a sort of rearview mirror, reflecting what’s behind, but not necessarily what’s ahead (which, by contrast, is very impacted by the degree of managerial competence and current events).

That said, beta can be a good tool for short-game investors looking to minimize risk. For long-term investors, it’s not necessarily that useful.

Moreover, beta is a number that says nothing about a stock’s price movement in terms of whether it’s going up or down. All beta tells you is a stock’s volatility relative to the market. This is especially problematic in light of the fact that investors, especially short-term traders, make their moves based on stock prices. However, in conjunction with other stats that give a more complete picture of a stock and its performance, beta can be a useful tool for assessing a security’s level of risk—for short term investors. Long-term investors will want to get a more complete picture of a company, how it’s run, and its level of debt before making an investment.

Investors should not just look at a stock’s beta, but also examine their own level of risk tolerance. Younger investors building a retirement portfolio can afford to take on more risks. After all, they have decades of investment ahead of them. Older investors nearing retirement want to avoid risk and do what they can to stabilize their portfolio as much as possible since it will become a source of income.

There are many strategies for investing in stocks, and they all depend on the investor's preferred mode of gain. A dividend investing strategy can turn rivulets of pennies into a mighty dividend stream, which is great for investors who want passive income. Day trading is great for investors who are skilled enough to leverage swings in the most volatile stocks at the drop of a hat. Other investors might find themselves somewhere between the long game and the short game, figuring out the best growth stocks to scoop up and sell at a profit weeks or months later.

Institutional investors may make a beta calculation as part of their equity and growth strategy, but it’s not the only tool they leverage for assessing how to respond to systematic risk. They do an in-depth micro and macro analysis of stats like market capitalization and general market volatility. Investors also perform fundamental and financial analysis of a company to consider future growth and dividend yield.

Low Beta Stocks

Beta tells you how risky a stock is by comparing its activity to that of the market. It’s important to combine financial signifiers like beta and even professional analyst ratings with fundamental analysis of a company. Alternatively, you can turn over investment decisions to a money manager.

Assessing the balance between risk and reward as it relates to financial gain is the bread and butter of short-term trading. But if short-term trading is not for you, you may consider other strategies such as searching for dividend-paying stocks, the snowballing equity of which can be rolled back into more dividend stocks. Retail investors can also piggyback invest by mimicking the portfolio of established investors with a track record of success. These strategies can be a much easier way for the average investor to increase their stock market earnings than attempting to leverage stock market beta. However, if you are looking to leverage short positions through day trading or similarly short-term asset growth, beta can be a useful tool for determining the risk of a particular security.

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