The VIX index, also known as the "fear gauge," measures the implied volatility of S&P 500 index options, and it increases when market uncertainty takes over. If a stock has a high historical correlation with the VIX, it has tended to perform well during times of volatility and uncertainty.
But of course, past performance is no guarantee of future results.
We ran a screen on dividend stocks that are technically oversold (with RSI(14) below 40). We screened these stocks for those with high historical correlations with VIX over the past three months.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these stocks would weather a stock market storm? Use this list as a starting-off point for your own analysis.
List sorted by correlation with VIX.
- Coca-Cola FEMSA S.A.B de C.V. (KOF): Beverages Industry. Market cap of $16.90B. RSI(14) at 33.11. Dividend yield at 2.23%, payout ratio at 26.13%. Correlation to the VIX index at 0.40. The stock has gained 33.69% over the last year.
- Alto Palermo S.A. (APSA): Property Management Industry. Market cap of $692.47M. RSI(14) at 24.59. Dividend yield at 4.66%, payout ratio at 25.51%. Correlation to the VIX index at 0.32. After a solid performance over the last year, APSA has pulled back during recent sessions. The stock is 18.98% below its SMA20 and 18.04% below its SMA50, but remains 10.49% above its SMA200. The stock has gained 185.58% over the last year.
- Microsoft Corporation (MSFT): Application Software Industry. Market cap of $215.15B. RSI(14) at 36.65. Dividend yield at 2.49%, payout ratio at 23.33%. Correlation to the VIX index at 0.25. Might be undervalued at current levels, with a PEG ratio at 0.91, and P/FCF ratio at 11.06. It's been a rough couple of days for the stock, losing 6.28% over the last week.
- Icahn Enterprises, L.P. (IEP): Property Management Industry. Market cap of $3.60B. RSI(14) at 30.94. Dividend yield at 4.71%, payout ratio at 17.07%. Correlation to the VIX index at 0.15. The stock has gained 13.58% over the last year.
*Price data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.