Stocks that don't correlate with the SP500?

Discussion in 'Trading' started by short&naked, May 10, 2009.

  1. How do you find them? What parameters do you have to specify with a scanner?
  2. Hester


    look for a beta much higher than 1. You can type that into just about any stock screener. If you dont know what beta is then google it.
  3. sjfan


    .... I think you mean to say beta less than 0
  4. sjfan


    to be specific, beta to the spx would equal to the covariance divided by the variance of spx; and correlation is the covariance divided by the std of spx and the std of the stock, so beta is the covariance multiply by the ratio of the variance of the stock to the variance of the spx
  5. auspiv


    dude you really need to listen to all that advice you you got on your thread... i recommend you go back to the drawing board for a few years before you decide what to do with all that money you inherited. i say this because you're dead wrong with the advice you just gave this dude.

    a beta much higher than 1 means the stock moves in the same direction, but with more intensity. for example, sso (2x spy bull) should have a beta of 2. sds (2x bear) should have a beta of -2. hopefully this clears up some misconceptions.
  6. Adding on to this, you should be looking for a beta that is around 0 (-.10 to .10) if you are looking for little to no correlation.