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Most Volatile Stocks In India in 2024

11 Mins 29 Mar 2024 0 COMMENT
stock volatility

 

Volatility is common in the stock market. The stock prices go up and down every second when the markets are functional. Hardly there would have been any stock, which had not been volatile ever in its history of existence. However, while every stock becomes a volatile stock under certain circumstances, or maybe for a certain tenure, there are some high-volatility stocks, which remain volatile most of the time.

While these high-volatility stocks pose a risk to the investors, if the volatility can be used positively, one can churn out great returns from these stocks too.

What Do You Mean by Volatility in the Stock Market?

Volatility can be defined as a parameter used in statistical studies, which indicates both frequency and intensity of change over a particular period. In the stock market, it can be referred to as the intensity and frequency of price fluctuation of stocks over a given period.  

When the prices move with high intensity and frequency creating a significant gap between the lowest price and highest price of a stock, it can be termed as a high volatility stocks. As risk and volatility are directly proportional, the higher the volatility and the higher the risk associated with the stock.

How to Identify Highly Volatile Stocks?

One of the most crucial metrics for identifying the most volatile stocks in India is Beta. This financial metric measures stock volatility comparing them with the benchmark index. However, Beta determines the systematic risk of a stock, which cannot be mitigated with diversification.

If the Beta of a stock is less than 1 then the stock is less volatile compared to the benchmark index. However, any minute change in the index can also be reflected in the stock prices.

On the other hand, stocks having a Beta of more than 1 are highly volatile showcasing heavy fluctuations. However, these stocks are also those stocks, which offer above-average returns usually, however, the risk associated is also high. Now, in expectations of above-average return, the demand for these stocks increases which in turn pulls the trading volume up.

If the Beta of the stock is exactly 1, then its volatility is at par with the benchmark index.

Apart from Beta, another thing that one should look for in a stock with the highest volatility is whether it has a high risk-return ratio or not. High volatility always corresponds with a high risk-return ratio. Thus, higher returns are expected from highly volatile stocks.

Top Volatile Stocks 2024

The top five stocks with the highest volatility in 2024 are as follows -

Stocks

Market Cap (Rs.cr.)

Beta - 1 Year

Beta - 3 Years

Bajaj Finance

4,17,839

1.69

1.61

Adani Ent.

3,54,278

2

2.06

Tata Motors

3,25,573

1.72

1.61

DLF

2,14,337

1.85

2.16

Adani Power

2,04,823

2.83

2.47

 

Overview of the Most Volatile Stocks

Let's dig deeper into the five most volatile stocks of 2024 –

  1. Bajaj Finance: This financial services business holds a special place in the market when it comes to retail loans, consumer finance, and similar services. With a market capitalization of Rs. 417839 crores, it is one of the leading businesses in the financial service arena. However, in 2024, the stock has become one of the most volatile stocks in India, which has a 1-year Beta of 1.69 and a 3-year Beta of 1.61.
  2. Adani Enterprise: Adani Enterprise stock gained 20% upside in a single day after the Supreme Court's verdict on the Hindenburg Case. This is now the second most fluctuating stock in the country. It has a market capitalization of Rs. 354278 crores. Both 1-year and 3-year Beta stands at 2 and 2.06 respectively, making the stock highly volatile.
  3. Tata Motors: You must be amazed to see Tata Motors on this list, but yes, this is the third stock with the highest volatility in 2024. This automobile giant has a market capitalization of around Rs. 325573 crores and its Beta stands at 1.72 and 1.61 for 1-year and 3-year respectively.
  4. DLF: The real-estate giant has a 3-year Beta of 2.16 which makes the stock highly volatile. However, its 1-year Beta has come down from the same and it is 1.85, but still, it is one of the most volatile stocks of 2024 to date.
  5. Adani Power: The Hindenburg case has made Adani Group stocks highly volatile. This energy stock with a market capitalization of Rs. 204823 crores has an immensely high 1-year Beta of 2.83 and even the 3-year Beta stands at 2.47 which depicts the extreme fluctuation in the stock price in the past few years.

Advantages of Investing in Highly Volatile Stocks

  • High volatility stocks offer great scope for making profits to the traders. Since the volatility is high, and the gap between the lowest and highest price is significant, the trade gets a good window to churn out profit if he can figure out the entry and exit points.
  • Often volatile stocks are from small and mid-scale companies whose stocks are not highly expensive. This helps retail traders also explore the opportunities and gain some returns.
  • Most volatile stocks in India offer higher return potential as the prices fluctuate giving room for better returns and may beat inflation. However, you need to consider the risk factors as well.

Factors to Consider Before Investing in High-Volatile Stocks

  • High-volatility stocks are not for risk-averse investors. If you are investing in these stocks, be prepared for heavy fluctuations. Do not let your emotions or fear drive your investment or trading decision.
  • Another crucial factor to consider is the period for holding these stocks. If you are interested in investing in them, it is better to invest and forget for a longer tenure and not be bothered by short-term fluctuations. However, for traders, these stocks are most suitable as they can churn out profit out of the volatility.
  • The next thing to evaluate is the market condition. Look for the company’s announcements, any court’s verdict, or government policies, which can affect any business significantly. You can see high volatility here.
  • Do not forget to place stop-loss orders when dealing in high-volatility stocks as these stocks can take you up or to the bottom within a blink of an eye.

Conclusion

Therefore, volatile stocks double-sided sword, while one side can give you the required returns, at the same time, you have risk from the other side. Thus, careful analysis and wise decision making is the key to success when dealing with these stocks.

FAQs on Most Volatile Stocks in India

1. Which stock has high volatility?

As per 1-year Beta, in 2024 Adani Power has the highest volatility until now. It has a 1-year Beta of 2.83.

2. Is high volatility good in stocks?

High volatility can help traders earn great returns, but there is a risk of losing money as well.

3. How do you find volatile stocks?

You can look for the stocks, which have a Beta above 1 as they are considered to be the most volatile stocks.