The market's robust performance seems to hinge largely on the anticipation of a rate cut. A market downturn could be triggered if the Federal Reserve decides not to reduce rates. In this scenario, focusing on a portfolio of low-beta stocks may be a prudent approach to reduce exposure to potential market volatility.

Stocks like Sprouts Farmers Market Inc. SFM, Trip.com Group Limited TCOM, Stride Inc. LRN and Virtu Financial Inc VIRT are worth betting on.

What Does Beta of a Stock Measure?

Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.

If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.

For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.

Screening Criteria Using Research Wizard:

We have taken a beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters that can add value to the portfolio.

Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.

Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.

Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.

Zacks Rank Equal to 1: Zacks Rank #1 (Strong Buy) stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are four among 11 stocks that qualified for the screening:

Sprouts Farmers Market

Increasing customer engagement and solid comparable store sales are benefiting Sprouts Farmers Market. SFM is positioning itself for continued growth with plans to open 33 new stores in 2024 and a projected comparable store sales growth of 8% to 10% for the fourth quarter of 2024.

Trip.com Group

Trip.com Group is poised to gain from catering to senior citizens’ growing interest in travel and travel bookings from lower-tier cities in China. Using artificial intelligence, the company has been efficiently serving more people.

Virtu Financial

Virtu Financial is making great progress with its Virtu Technology Solutions, which is becoming more popular. This service helps other companies, like broker-dealers, use advanced tools for trading and analyzing financial data. By offering these high-tech solutions, Virtu is setting itself up for long-term growth and success in the market. 

Stride

Stride maintains a stable business model by revolutionizing the educational experiences of individuals through the utilization of innovative, high-quality and technology-enabled educational solutions.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

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Stride, Inc. (LRN) : Free Stock Analysis Report

Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report

Trip.com Group Limited Sponsored ADR (TCOM) : Free Stock Analysis Report

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