20 Tech Stocks With Negative VIX Correlation Ahead Of Earnings

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 |  Includes: ADVS, AVX, CTXS, DDD, ENTG, FEIC, IIVI, INAP, JDAS, NATI, OPLK, OSIS, PLXS, PTC, QLGC, QTM, SYMC, TER, ULTI, VRTU
by: Kapitall

If you think that market volatility will calm down in the near future, one way to trade with the idea is by looking for stocks with very negative correlations to market volatility.

A good proxy for volatility is the VIX index, which measures the implied volatility of S&P 500 index options. If a stock has negative historical correlation with the VIX, it has tended to perform well when volatility and uncertainty subside. (Of course, past performance is no guarantee of future returns.)

We ran a screen on tech stocks that are reporting their third-quarter earnings next week for those with very negative correlation to VIX.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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 companies will benefit from a calmer market? Use this list as a starting-off point for your own analysis.

List sorted by correlation to VIX.

1. JDA Software Group Inc. (NASDAQ:JDAS): Provides enterprise software solutions to enable planning, optimization, and execution of merchandising and supply chain processes primarily in the Americas, Europe, and the Asia Pacific. Market cap of $1.13B. Earnings to be announced on 10/27. Correlation to the VIX index at -0.96. The stock is a short squeeze candidate, with a short float at 6.11% (equivalent to 9.65 days of average volume). The stock has gained 16.62% over the last year.

2. Teradyne Inc. (NYSE:TER): Provides automatic test equipment products and services worldwide. Market cap of $2.33B. Earnings to be announced on 10/26. Correlation to the VIX index at -0.95. The stock has recently rebounded, and is currently trading 9.08% above its SMA20 and 9.29% above its SMA50. However, the stock still trades -13.19% below its SMA200. The stock has gained 9.9% over the last year.

3. Ultimate Software Group, Inc. (NASDAQ:ULTI): Designs, markets, implements, and supports unified human capital management software-as-service (SaaS) solutions to businesses, providing a single source for comprehensive human resources, payroll, and talent management technology. Market cap of $1.35B. Earnings to be announced on 10/25. Correlation to the VIX index at -0.95. The stock is a short squeeze candidate, with a short float at 13.98% (equivalent to 14.66 days of average volume). The stock has gained 28.52% over the last year.

4. AVX Corp. (NYSE:AVX): Manufactures and supplies passive electronic components and interconnect products worldwide. Market cap of $2.09B. Earnings to be announced on 10/26. Correlation to the VIX index at -0.94. The stock has lost 10.23% over the last year.

5. QLogic Corp. (NASDAQ:QLGC): Engages in the design and supply of storage networking, high performance computing networking, and converged networking infrastructure solutions. Market cap of $1.39B. Earnings to be announced on 10/27. Correlation to the VIX index at -0.94. Might be undervalued at current levels, with a PEG ratio at 0.88, and P/FCF ratio at 8.04. The stock has lost 21.73% over the last year.

6. Virtusa Corp. (NASDAQ:VRTU): Provides information technology consulting, technology implementation, and application outsourcing services in North America, Europe, the Middle East, India, and Sri Lanka. Market cap of $395.34M. Earnings to be announced on 10/24. Correlation to the VIX index at -0.94. The stock has had a couple of great days, gaining 6% over the last week.

7. Symantec Corporation (NASDAQ:SYMC): Provides security, storage, and systems management solutions to secure and manage information. Market cap of $13.06B. Earnings to be announced on 10/26. Correlation to the VIX index at -0.93. The stock has gained 12.88% over the last year.

8. II-VI Inc. (NASDAQ:IIVI): Develops, manufactures, and markets high-technology materials and derivative precision components and products worldwide. Market cap of $1.25B. Earnings to be announced on 10/25. Correlation to the VIX index at -0.93. The stock has recently rebounded, and is currently trading 12.45% above its SMA20 and 11.04% above its SMA50. However, the stock still trades 11.89% below its SMA200. The stock has had a couple of great days, gaining 5.89% over the last week.

9. OSI Systems, Inc. (NASDAQ:OSIS): Designs, manufactures, and sells specialized electronic systems and components for applications in homeland security, healthcare, defense, and aerospace markets worldwide. Market cap of $792.68M. Earnings to be announced on 10/25. Correlation to the VIX index at -0.93. Exhibiting strong upside momentum--currently trading 17.43% above its SMA20, 17.94% above its SMA50, and 11.78% above its SMA200. The stock has had a good month, gaining 13.51%.

10. Oplink Communications Inc. (NASDAQ:OPLK): Designs, manufactures, and sells optical networking components and subsystems worldwide. Market cap of $303.42M. Earnings to be announced on 10/27. Correlation to the VIX index at -0.93. The stock is a short squeeze candidate, with a short float at 5.82% (equivalent to 5.39 days of average volume). The stock has lost 24.7% over the last year.

11. 3D Systems Corporation (NYSE:DDD): Engages in the design, development, manufacture, marketing, and servicing of 3D printers and related products, print materials, and services. Market cap of $826.19M. Earnings to be announced on 10/27. Correlation to the VIX index at -0.92. The stock is a short squeeze candidate, with a short float at 14.3% (equivalent to 10.9 days of average volume).

12. Plexus Corp. (NASDAQ:PLXS): Provides contract electronic manufacturing services to original equipment manufacturers and other technology companies. Market cap of $941.02M. Earnings to be announced on 10/26. Correlation to the VIX index at -0.92. The stock is a short squeeze candidate, with a short float at 8.86% (equivalent to 8.02 days of average volume). The stock has lost 20.12% over the last year.

13. Quantum Corporation (NYSE:QTM): Operates as a storage company that provides backup, recovery, and archive solutions to small businesses to multinational enterprises in the United States and internationally. Market cap of $533.37M. Earnings to be announced on 10/27. Correlation to the VIX index at -0.92. This is a risky stock that is significantly more volatile than the overall market (beta = 3.29). The stock has recently rebounded, and is currently trading 18.2% above its SMA20 and 21.96% above its SMA50. However, the stock still trades 13.49% below its SMA200. The stock has had a couple of great days, gaining 9% over the last week.

14. Parametric Technology Corporation (PMTC): Develops, markets, and supports product lifecycle management software solutions and services that help companies design products, manage product information, and improve product development processes worldwide. Market cap of $2.06B. Earnings to be announced on 10/26. Correlation to the VIX index at -0.91. The stock has recently rebounded, and is currently trading 11.26% above its SMA20 and 7.26% above its SMA50. However, the stock still trades 15.12% below its SMA200. The stock has lost 13.38% over the last year.

15. FEI Co. (NASDAQ:FEIC): Supplies instruments for nanoscale imaging, analysis, and prototyping that enable research, development, and manufacturing in industrial, academic, and research institutional applications. Market cap of $1.25B. Earnings to be announced on 10/27. Correlation to the VIX index at -0.91. The stock is a short squeeze candidate, with a short float at 7.53% (equivalent to 5.95 days of average volume). The stock has had a couple of great days, gaining 8.5% over the last week.

16. Internap Network Services Corp. (NASDAQ:INAP): Provides information technology (NYSE:IT) infrastructure services. Market cap of $287.68M. Earnings to be announced on 10/27. Correlation to the VIX index at -0.91. The stock has recently rebounded, and is currently trading 10.97% above its SMA20 and 13.96% above its SMA50. However, the stock still trades 12.32% below its SMA200. The stock has gained 10.24% over the last year.

17. Citrix Systems, Inc. (NASDAQ:CTXS): Designs, develops, and markets technology solutions that deliver information technology services on-demand worldwide. Market cap of $11.71B. Earnings to be announced on 10/27. Correlation to the VIX index at -0.91. The stock has had a couple of great days, gaining 7.26% over the last week.

18. Entegris, Inc. (NASDAQ:ENTG): Develops, manufactures, and supplies products and materials used in processing and manufacturing in the semiconductor and other high-technology industries worldwide. Market cap of $1.04B. Earnings to be announced on 10/26. Correlation to the VIX index at -0.91. Might be undervalued at current levels, with a PEG ratio at 0.89, and P/FCF ratio at 8.37. The stock has gained 47.89% over the last year.

19. Advent Software, Inc. (NASDAQ:ADVS): Provides software and services that automate work flows and data across investment management organizations, as well as the information flows between an investment management organization and external parties. Market cap of $1.18B. Earnings to be announced on 10/24. Correlation to the VIX index at -0.91. The stock is a short squeeze candidate, with a short float at 5.57% (equivalent to 10.05 days of average volume). The stock has recently rebounded, and is currently trading 5.59% above its SMA20 and 5.97% above its SMA50. However, the stock still trades 12.36% below its SMA200. The stock has lost 15.86% over the last year.

20. National Instruments Corporation (NASDAQ:NATI): Manufactures and supplies measurement and automation products. Market cap of $2.96B. Earnings to be announced on 10/26. Correlation to the VIX index at -0.91. The stock has gained 14.25% 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.