Negative Beta Stocks (Market Close: September 15, 2023)

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• Describe stock BETA.
• Describe negative stock BETA, how it happens and what it means.
• List of current negative BETA stocks.
  
• What is a stock with negative BETA?
  

BETA is the measure of the systematic risk, or degree to which a stock moved as a multiple of the overall stock market. We measure this movement over a year, against the S&P 500 Index ETF.

A BETA of one implies a stock generally moved with the market, between zero and one means it moved less quickly, but still with the market, and a BETA greater than one means a stock moved more aggressively, but aligned with the market. It is proportional, so a beta of 2 implies it moves twice as much as the market. We see BETA values up to 3.50 in our model.

A stock with a negative BETA moved in the opposite direction of the market. It implies an inverse relationship between that stock and the market over the past year. It has zigged, when the market has zagged. It rose when the market fell.

There are very few stocks that move consistently against the market, because the market values the same thing in most stocks, profitability, growth, cash flows and book values. One idea is that certain companies do better when the market falls, like pawn shops, thrift stores, moving and storage companies, and subprime lenders. Negative BETA stocks are an anomaly, like a Giffen good. That's why they say: "​A Rising Tide Lifts All Boats."

We keep track of negative BETA stocks, and we provide them to our clients each day. They may be a portfolio hedge. They may be companies that have their own business cycles independent of the market, like an oil or drug company that strikes it rich (e.g., new discovery) during a stock market decline. Another example is a company in decline (e.g., heading towards bankruptcy) during a stock market rally.

We list below all common stocks with negative BETA values for the past year vs. a large US equity index ETF.
This list has been growing recently. We see more negative BETA stocks than the past few weeks.

BATRK  -0.019 Atlanta Braves Holdings Inc                       
CANO   -0.381 Cano Health Inc                                   
CDTX   -0.270 Cidara Therapeutics Inc                           
CLNN   -0.313 Clene Inc                                         
COR    -0.007 Cencora Inc.                                      
CPK    -1.391 Chesapeake Utilities Corp                         
FI     -0.179 Fiserv  Inc.                                      
FWONA  -0.156 Liberty Media Corp.                               
FWONK  -0.172 Liberty Media Corp.                               
INVA   -0.034 Innoviva Inc                                      
KALV   -0.029 KalVista Pharmaceuticals Inc                      
NRBO   -0.308 NeuroBo Pharmaceuticals Inc                       
RLMD   -0.621 Relmada Therapeutics Inc                          
SBGI   -0.133 Sinclair Inc                                      
SDOT   -0.376 Sadot Group Inc                                   
SMMT   -0.083 Summit Therapeutics Inc                           
SQQQ   -3.789 ProShares UltraPro Short QQQ -3x Shares           
TZA    -3.396 Direxion Daily Small Cap Bear 3X Shares           
UHAL   -2.924 U-Haul Holding Company                            
UUP    -0.248 Invesco DB US Dollar Index Bullish Fund           
UVXY   -2.922 ProShares Ultra VIX Short-Term Futures ETF 2x Shares
VERU   -0.446 Veru Inc                                          
VIXY   -1.956 ProShares VIX Short-Term Futures ETF              
​

What stock BETA means in the stock market

BETA is the degree that a stock moves with the stock market.  BETA is the degree of correlation, and the systematic risk of a stock. BETA is calculated by the covariance of a stock (x) with an index (y) divided by the variance of the index: covariance x,y / variance y.

Video explaining negative BETA stocks

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