Looking to add financial stocks to your portfolio? If you think more volatility in the market is approaching you may want to avoid stocks that are negatively correlated with volatility.
We screened the S&P 500's financial stocks for those with strong negative correlations to the volatility (VIX) index over the last two months. This indicates that these stocks have tended to underperform when market uncertainty and volatility spiked. This serves as a warning for investors who see more volatility in the future. Of course, past performance is no guarantee of future returns.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
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Do you think these stocks would weather a stock market storm? Use this list as a starting point for your own analysis.
List sorted alphabetically.
1. Cincinnati Financial Corp. (CINF): Engages in the property casualty insurance business in the United States. Market cap at $6.31B, most recent closing price at $38.84. Correlation with the VIX index at -0.919 over the last 60 days.
2. Discover Financial Services (DFS): Operates as a credit card issuer and electronic payment services company primarily in the United States. Market cap at $19.85B, most recent closing price at $38.55. Correlation with the VIX index at -0.906 over the last 60 days.
3. Northern Trust Corporation (NTRS): Provides investment management, asset and fund administration, banking solutions, and fiduciary services for corporations, institutions, and affluent individuals worldwide. Market cap at $11.14B, most recent closing price at $46.31. Correlation with the VIX index at -0.901 over the last 60 days.
4. Suntrust Banks, Inc. (STI): Operates as the holding company for Suntrust Bank, which provides various financial services to consumer and corporate customers in the United States. Market cap at $13.35B, most recent closing price at $24.79. Correlation with the VIX index at -0.913 over the last 60 days.
5. Weyerhaeuser Co. (WY): Weyerhaeuser Company, a forest product company, grows and harvests trees, builds homes, and manufactures forest products worldwide. Market cap at $13.24B, most recent closing price at $24.62. Correlation with the VIX index at -0.9 over the last 60 days.
Written by Rebecca Lipman. 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.