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What is the simplest way to scan a group of stocks (found in a chartlist) to rank for Beta

In selecting new stocks to buy I would like (as one of my filters) to pick those with higher beta, ie those most likely to rise fast and far once they start rising. Can someone tell me how to best do this?
Thank you.

Best Answer

  • markdmarkd mod
    Accepted Answer
    I don't see an option for beta in the Scan Builder drop downs. However, SCTR rankings are probably a pretty good substitute. You could scan for rank by SCTR and look at the highest ranked SCTRs, or better yet, I think, rank by change in SCTR (e.g. rank by [SCTR - 20 days ago SCTR]).

    Beta is backward looking, of course. Greg Morris wrote an excellent blog article explaining alpha and beta, with some commentary on their value. The blog article is here:

    stockcharts.com/articles/dancing/2015/03/linear-analysis-alpha-and-beta.html?st=beta

    Finviz allows you to filter for beta on their screener. Beta is under the "Technical" tab. If your lists are based on sectors or industries, you can probably come close to recreating those lists with the "Descrptive" tab filters. (You can also download the Finviz results to an excel file, which, with some editing, you can then upload into a Stockcharts list (or just transcribing might be easier).

    The screener is here.

    finviz.com/screener.ashx?v=111

    Most of the best opportunities are going to be in the leading sectors, which of course are rotating over time. You might want to create a Performance chart with the sector SPDRs, and maybe another several Performance charts for the $DJUS indices for each sector. Then look for the ones where the perf line is turning up.

    Or, you can just concentrate on historically volatile cyclical sectors like Energy, Materials, Biotech, and Technology. But, volatility in those areas cuts both ways. Earnings, or the prospect of earnings, drive the better performers. If you are interested in researching fundamentals, IBD is pretty good. But there, too, I think I would look more at improving rankings rather than top rankings - a lot of stocks reach top rank and then tank. If you think about it, it's an ideal time for those who got in at the bottom (patient, professional money) to get back out.

Answers

  • Thank you @markd for yet another superb answer. I have already been using change in Sctr a bit and will read the article by Greg Morris. I will also check out the finbiz site you suggested and start looking for turn ups on a Sector Perf chart. Thanks again.
  • @Markd thanks also for the gentle hint about patient, professional money getting back out at this point. I agree and encourage the tip.
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