Best High Volatility Stocks of Nifty 500 (2024) (2024)

Last Updated on Jan 19, 2024 by Anjali Chourasiya

The volatility of a stock expresses the degree of risk associated with it. So, isn’t it better to know about the stocks that are volatile in order to avoid risk and balance your portfolio? In this article, let’s look at what volatile stocks are, how to identify them among various stocks present in the National Stock Exchange (NSE), the best high volatility stocks of Nifty 500, their details, and what filters we used on Tickertape Stock Screener to get the list.

Most volatile stocks in India (2024)

Note: The data is dated 18th January 2024. The stocks are based on the following filters used on the Tickertape Stock Screener:

• Stock Universe: Nifty 500
• Volatility: High (Sort from highest to lowest)
• Beta: High

What are volatile stocks?

Volatility in the stock market indicates the movement in the stock from its original value or the movement in comparison to the overall market. Volatile stocks are stocks that fluctuate often. They are different for different kinds of traders. For instance, high volatility for intraday traders can be the difference in the high and low prices of a stock in one day. For some, it can be the high difference in the volumes traded on one day or for a duration. For some traders, it can be the difference in any factor (price, volume, etc.) compared to historical data.

Features of the most volatile stocks to invest in India

Here are some basic features of the most volatile stocks:

• Frequent and substantial price swings
• High beta values
• Smaller market capitalization
• Sensitivity to news and external events
• Increased trading volume
• Irregular or unpredictable earnings
• Industry-prone rapid changes or technological advancements
• Historical volatility

Details on the filters used to get the list of most volatile stocks

• Nifty 500

The NIFTY 500 Index has the top 500 companies based on the full market capitalisation of the NSE. It represents about 96.1% of the free float market capitalisation of the stocks listed on the NSE.

• Volatility

Volatility refers to the fluctuations in the value of a stock from its original value. It expresses the degree of risk associated with a security’s price fluctuations. This parameter is widely used by investors and traders to assess price changes and forecast future moves.

• Beta

When it comes to finding the most volatile stocks, Beta is one of the most important indicators to consider. It measures a stock’s volatility in relation to the overall market. A Beta of more than 1 signifies that a stock is more volatile than the market. High-beta stocks are usually considered riskier. Hence, when you are looking at the most volatile stocks, Beta is an important indicator to consider.

Details of the top 5 high volatile stocks

Adani Enterprises Ltd

With a market cap of Rs. 3,32,754.93 cr., Adani Enterprises Limited is a large-cap infrastructure company with businesses spanning coal trading, coal mining, oil and gas exploration, ports, multi-modal logistics, power generation, and transmission and gas distribution. The stock ranks first in the most fluctuating stocks in India.

• The stock is 7.68x as volatile as Nifty.
• Over the last 5 yrs, the revenue growth has averaged 36.45%, vs the industry average of 15.73%.
• As per the Tickertape Scorecard, the stock has a profitability score of 6.9 out of 10, which is considered good. The stock has a moderate number of red flags.

Learn more about the stock’s performance here.

Adani Green Energy Ltd

With a market cap of Rs. 2,51,583.96 cr., Adani Green Energy Ltd is a power generation company. It builds and operates solar and wind energy power plants in India. The stock ranks second in the list of highly volatile stocks in India.

• The stock is 6.33x as volatile as Nifty.
• Over the last 5 yrs, the net income has averaged 219.12%, vs the industry average of 37.99%.
• As per the Tickertape Scorecard, the stock is overpriced but is not in the overbought zone. Adani Green Energy also has a moderate number of red flags.

Click here to learn more about the stock’s financial performance.

Adani Transmission Ltd

With a market cap of Rs. 1,18,855.75 cr., Adani Transmission Ltd is engaged in engineering, construction management/operation and maintenance business. The company’s businesses include engineering, procurement, construction and utilities. Adani Transmission Ltd ranks third in the most fluctuating stocks in India.

• The stock is 6.55x as volatile as Nifty.
• Over the last 5 yrs, the revenue growth has averaged 33.62%, vs the industry average of 8.03%.
• As per the Tickertape Scorecard, the stock is overvalued and lags in financial growth compared to its peers.

Check out a thorough peer comparison here.

Adani Total Gas Ltd

With a market cap of Rs. 1,08,122.33 cr., Adani Total Gas Ltd is in the business of developing city gas distribution networks to supply piped natural gas to the industrial, commercial, domestic, and compressed natural gas industries and the transportation sector. The stock ranks fourth in the highly volatile stocks in India.

• The stock is 6.91x as volatile as Nifty.
• Over the last 5 yrs, the net income has averaged 31.08%, vs the industry average of 17.83%.
• As per the Tickertape Scorecard, the stock has zero red flags and shows good signs of profitability and efficiency.

Find out the details on red flags present in the stock here.

ITI Ltd

With a market cap of Rs. 33,347.58 cr., ITI Ltd is engaged in manufacturing, trading, and servicing telecommunication equipment and rendering other associated and ancillary services. The stock ranks fifth in the list of most fluctuating stocks in India.

• The stock is 5.92x as volatile as Nifty.
• Over the last 5 yrs, the revenue growth has averaged -2.42%, vs the industry average of 12.48%.
• As per the Tickertape Scorecard, the stock has an average profitability score, good performance score, and is overvalued.

Learn more about the stock’s performance here.

How to identify highly volatile stocks?

Apart from filtering the highly volatile stocks using the abovementioned filters, you can track the Nifty High Beta 50 index. It tracks the most volatile stocks in the NSE and compares them with the benchmark index.

When looking for high-volatility stocks, the risk-return ratio is one of the most important factors to consider. You can also use Beta to track the fluctuations in the stock. The idea behind the indicator Beta is to gauge the stability of security. It should not take wild swings and could absorb any wild momentum in the benchmark index. The baseline of Beta is 1.

• A Beta of 1 indicates that the stock shows the same volatility as the market.
• A Beta > 1 means the stock is more volatile than the broader market.
• A Beta < 1 indicates that the stock is less volatile than the overall market.

Factors to consider before investing in high-volatile stocks

Fluctuating stocks may have the potential for higher returns, but they also come with more risk. So, it’s smart to consider the factors mentioned below before investing.

1. Risk tolerance: It is one of the most important factors to consider before investing in fluctuating shares. Assessing your risk tolerance levels can help you understand if you are comfortable with the high price swings associated with highly volatile stocks.
2. Investment timeframe: High volatile stocks are often considered for the short term. Hence, it may be wise to examine your investment goals and their timeframe and check if they align with the short-term nature of highly volatile stocks.
3. Fundamental analysis: When you invest, take a close look at the company’s important numbers like profits, money flow, and debts. Understanding these basics is crucial, especially when a stock is volatile. It may help you make sense of the company’s core strengths and weaknesses.
4. Market conditions: Reflect on prevailing market conditions and specific events or factors influencing the performance of highly volatile stocks. Consider the broader volatility landscape in the market.
5. Diversification: Diversification means spreading your money across different types of investments. When dealing with highly volatile stocks, it’s smart not to put all your money in just one of these volatile stocks. This helps lower the chances of losing a lot if that one stock doesn’t do well. So, spreading your money around different stocks can help protect your overall investment and make it more stable.
6. Risk management: It is crucial to know in advance when you want to start and stop investing. Use stop-loss orders to limit how much money you could lose. Also, figure out the balance between how much risk you’re taking and the rewards you want. Make a good plan to manage risks and keep your money safe. It is always worthwhile to consult a financial advisor who can help you manage risks while investing.
7. Research and analysis: Tools and resources help you analyse how high volatile stocks performed in the past and their up-and-down patterns. For this purpose, the Tickertape Stock Screener is equipped with over 200 filters so you can narrow down your search based on your preferred filters. You can also create custom filters. Further, each stock page is overwhelmed with information about the stock performance, insights, a Scorecard, future predictions, and more. List high volatile stocks based on your preferred criteria NOW!
8. Market sentiment: Consider the prevailing sentiment in the market, as it can significantly impact the volatility of stocks. Be attuned to market sentiment indicators and news that may influence stock prices. To check the market mood of the day, you can check out the Market Mood Index, which takes into account 6 important factors to give a complete picture of emotions driving the market and share market mood in terms of fear and greed. Check it out now!
9. Earnings outlook: Evaluate the earnings outlook for the companies associated with highly volatile stocks. Positive or negative earnings forecasts can influence investor sentiment and stock prices.

Advantages of investing in highly volatile stocks

• With high fluctuations, there is always an opportunity for investors to earn higher profits even if the benchmark index moves upward even a bit.
• Most of the high volatile stocks are generally mid-cap and small-cap. Some of these could be available at a lower cost.

Disadvantages of investing in highly volatile stocks

• When the fluctuations are high, there is a possibility of higher gains. However, with a slight downward fall in the benchmark index, the fall in the value of the stock can be more than it should be.
• In case there is poor or faulty management of a company, or they fail to meet their targets, even if the market is rising, the highly volatile stocks can fall drastically in value.

Hence, proper research is highly important when investing in highly volatile stocks. It is always worthwhile to ask a financial advisor for guidance.

Why do people invest in high volatile stocks?

Investors are drawn to high volatile stocks for several reasons. Some investors are attracted to quick profit opportunities from rapid price movements, especially day traders who capitalize on short-term gains within a single day. Others see volatile stocks as a way to diversify portfolios, adding risk for potential long-term returns.

While the excitement of volatility may attract, it comes with risks. market ups and downs can result in significant losses, emphasizing the need for careful research and risk evaluation before jumping into the world of highly volatile stocks.

Tips for investors while investing in high volatile stocks

Here are some tips that may help you while you are investing in highly volatile stocks.

• Conduct thorough research on the stock, considering its past performance, market trends, and company basics.
• Evaluate your own comfort with risk before investing in highly volatile stocks, as they can result in significant losses.
• Align your investment goals with the short-term nature of highly volatile stocks, especially if you aim for quick profits.
• Avoid putting all your money in one highly volatile stock; spread your investments to reduce risk.
• Implement stop-loss orders to limit potential losses and set predetermined exit points for risk management.
• Stay informed about market news, company updates, and economic indicators affecting volatile stocks.
• Consider prevailing market conditions and specific events influencing the stock before making decisions.
• Approach volatile stock investments with discipline, stick to your strategy and be ready for market fluctuations.

To conclude

Looking at the volatility factor might help you gauge the riskier stocks. Hence, before investing, analyse the risk factors and your risk appetite. It is always worthwhile to take the advice of a financial advisor before moving ahead. To keep yourself informed about the financial terminologies, stocks based on various themes, and how to use financial tools effectively, read Blog by Tickertape.

FAQs

What is volatility in the stock market?

Volatility in the stock market indicates the movement in the stock from its original value or the movement in comparison to the overall market. The higher the volatility, the more dramatically the price of security changes over a short period of time.

What is the Beta of a stock?

The Beta is an important indicator which signifies the fluctuations in the value of a stock in relation to the overall market. The higher the Beta, the riskier the stock is considered.

What is the formula of Beta?

Beta can be calculated using the formula:

Covariance/Variance of market returns

Here, covariance measures how two stocks react to each other in changing market conditions. When the two stocks move in unison, a positive covariance is achieved. In contrast, covariance is negative when the two stocks move in different directions.

Variance represents the price deviation of the fund over a given period. Thus, it quantifies how much the fund’s price has deviated from its mean.

Which are the most volatile stocks in NSE?

Based on high volatility and high beta filters used on the Tickertape Stock Screener on date 18th January 2024, the following are the most volatile stocks in NSE:

• Adani Enterprises Ltd
• Adani Green Energy Ltd
• Adani Transmission Ltd
• Adani Total Gas Ltd
• ITI Ltd
• Olectra Greentech Ltd
• MMTC Ltd
• Brightcom Group Ltd

Is it financially rewarding to invest in the most volatile stocks?

Yes, investing in the most volatile stocks can be financially rewarding. High market fluctuations create opportunities for profit, especially during upward movements, and volatile stocks are often available at lower costs. However, it’s important to note that higher volatility is associated with higher risk, and thorough research and risk assessment are crucial before investing in such stocks.