- Stock volatility is the fluctuation of stock price over a given period of time.
- Higher volatility is associated with more risky stocks.
- Investments in volatile stocks should be made based on one’s risk tolerance.
The Covid-19 pandemic has created a lot of volatility and uncertainty in the global stock markets. But market volatility has existed even before that and will continue to exist in the future as well. All traders have different risk appetites. While some traders are more risk averse and prefer shares with lower risk, such as blue-chip companies, other are willing to take more risk and invest in shares with rapidly fluctuating prices to trade on volatility.
Price fluctuations of volatile stocks may reach even up to several hundred percent during the day. Lesser volatility is generally seen in developed markets, which doesn’t exceed more than 20-30%. With higher risks come higher returns, and thus investing in volatile stocks may appear to be a profitable option, but its is very important to consider your risk tolerance and conduct meticulous research to identify the stocks which offer generous returns with tolerable volatility.
The most popular way to understand the volatility of a stock is by analysing the standard deviation or variance between returns from the same asset over a period of time.
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Let’s look at some of the volatile stocks that investors should consider.
Harbour Energy PLC (LON: HBR)
Harbour Energy PLC is the UK's largest independent oil and gas company with a current market capitalisation of £3,454.09 million. Its earning per share is 3.98 and it has given a return of 19.000% in 1 year. The previous close price of Harbour Energy PLC’s shares was GBX 373.20 as on 27 September 2021.
Hemogenyx Pharmaceuticals PLC (LON: HEMO)
Hemogenyx Pharmaceuticals PLC is a London-based biotechnology company that researches on creating advanced treatments for blood diseases. Its current market capitalisation is £19.59 million and has given a return of -80.96% in 1 year. The previous close price of Hemogenyx Pharmaceuticals PLC’s shares was GBX 2.00 as on 27 September 2021.
Echo Energy PLC (LON: ECHO)
Echo Energy PLC is a London-based Latin American focused oil and gas company with a current market capitalisation of £7.79 million. It has given a return of 53.07% in 1 year. The previous close price of Echo Energy PLC’s shares was GBX 0.60 as on 27 September 2021.
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Omega Diagnostics Group PLC (LON: ODX)
Omega Diagnostics Group PLC is an Alva-headquartered medical diagnostics company which mainly creates specialist products for on allergy, food intolerance and infectious diseases. With a current market capitalisation of £89.49 million, it has given a return of -38.81% in 1 year. The previous close price of Omega Diagnostics Group PLC’s shares was GBX 49.00 as on 27 September 2021.
Revolution Bars Group PLC (LON: RBG)
Headquartered in Ashton-Under-Lyne, Revolution Bars Group PLC is a UK-based leading operator of premium bars. Its current market capitalisation is £50.61 million, and it has given a return of 133.47% in 1 year. The previous close price of Revolution Bars Group PLC’s shares was GBX 22.00 as on 27 September 2021.