Do you worry about stock market volatility? One idea is to consider stocks that have a strong historically positive correlation to volatility, as represented by the VIX volatility index. These stocks have tended to perform well when market uncertainty takes over.
We ran a screen on the 200 largest companies by market cap, which we refer to as "mega-cap stocks," for those with strongly positive correlations to the VIX index over the last two months. This indicates that these stocks may have been treated as safe havens.
Of course, past performance does not guarantee future returns.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think the market will see more volatility in the future? Use this list as a starting point for your own analysis.
1. Bristol-Myers Squibb Company (NYSE:BMY): Develops, and delivers innovative medicines that help patients prevail over serious diseases. Market cap at $55.62B.Correlation with the VIX index at 0.554 over the last 60 days.
2. Chunghwa Telecom Co. Ltd. (NYSE:CHT): Provides integrated telecommunications services primarily in Taiwan. Market cap at $29.56B.Correlation with the VIX index at 0.782 over the last 60 days.
3. China Unicom (Hong Kong) Limited (NYSE:CHU): Engages in the provision of GSM and WCDMA cellular, and related telecommunications services in the People's Republic of China. Market cap at $40.11B.Correlation with the VIX index at 0.813 over the last 60 days.
4. NTT DOCOMO, Inc. (NYSE:DCM): Provides wireless telecommunications services, packet communications services, and satellite mobile communications services in Japan. Market cap at $74.51B.Correlation with the VIX index at 0.661 over the last 60 days.
5. Nippon Telegraph & Telephone Corp. (NYSE:NTT): Provides telecommunications services to residential and business customers in Japan. Market cap at $60.92B.Correlation with the VIX index at 0.724 over the last 60 days.
Written by Alexander Crawford. Price data sourced from Yahoo! Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.