Did You Own Any of These Volatile Stocks in 2020?
U.S. stock market volatility reached record highs in 2020. These are the most volatile stocks spread across different sectors
Dec. 31 2020, Published 10:36 a.m. ET
2020 is finally coming to an end. There were many stock market records in 2020, many of which were not pleasant. We saw the steepest bear market ever and volatility, as measured by the VIX index, hit record highs. Some stocks were especially volatile in 2020 — but what were the most volatile stocks of 2020?
There are various measures you can use to assess the volatility in stock markets. The first is the standard deviation measuring how much a stock has deviated from its mean over a period. Then we have the beta, which measures a stock’s volatility with respect to the index. We also have the maximum drawdown, which measures price movement from bottom to peak of a security.
2020 was a volatile year for U.S. stock markets
2020 was a volatile year for U.S. stock markets in general. Markets started to plunge towards the end of February and bottomed out on Mar. 23. Briefly, the Dow Jones erased all the returns gained under Donald Trump’s presidency. The ProShares Ultra VIX Short-Term Futures ETF (UVXY), which measures market volatility, spiked to an all-time high in March. However, while the fall in markets created a record, the recovery was relatively swift.
Cyclical stocks were most volatile in 2020
In March, many cyclical stocks fell to their all-time lows amid the uncertainty over the COVID-19 pandemic. However, as optimism started to build over vaccines, these stocks rallied. The stocks made wide swings whenever news over COVID-19 vaccine candidates came out.
We can divide the most volatile stocks in 2020 into the following broad categories. Many companies in these industries also suspended their dividends in the year.
- Energy stocks
- Cruise line companies
- Airline companies
- Leisure and entertainment companies
- Metal and mining companies
- Electric vehicle companies
Most volatile energy stocks in 2020
Occidental Petroleum was among the most volatile energy stocks in 2020. It has a 52-week trading range of $47.58-$8.52, reflecting how unstable it was in the year. While the stock bounced back from its lows, it is still down almost 60 percent for the year making it the worst-performing S&P 500 stock.
Cruise line stocks were very volatile in 2020
Cruise line stocks also bore a large portion of the brunt of COVID-related volatility. Royal Caribbean has a 52-week trading range of $19.25-$135.32. The stock is still down over 46 percent for the year despite bouncing back from its 52-week lows.
Airline companies too had a bad year and even Warren Buffett gave up on the sector, selling his holdings in all four airline companies in his portfolio. American Airlines stock is among the top 10 losers in the S&P 500 and has lost almost 44 percent. It has a 52-week trading range of $8.25-$30.78.
Other stocks in the leisure and entertainment space fared no better. AMC Theaters fell to a record low. It has a 52-week trading range of $1.95-$7.78. Marriott International stock was also very volatile and has a 52-week trading range of $46.56-$152.60.
Metal and mining companies were also very up and down
Metal and mining companies track price movement of the underlying commodities. Commodity prices plunged in March but have since risen to multi-year highs. U.S. Steel Corporation (X) stock fell to a 52-week low of $4.54 in 2020 and then made a 52-week high of $20. Cleveland-Cliffs stock was even more volatile. Its 52-week trading range is $2.63-$14.70.
Electric vehicle stocks were big movers as well — though mostly upward
Barring metal and mining companies, all the other companies that we’ve discussed so far lost heavily in 2020. However, on a positive note, while electric vehicle stocks were also volatile in 2020, they rose to record highs. Nikola was among the most volatile stocks in 2020. It has a 52-week trading range of $10.30-$93.99.
With an almost 700 percent gain in 2020, Tesla is the best performing S&P 500 stock. Meanwhile, 2020 was nothing short of a turnaround year for NIO stock. The stock is up over 1,100 percent in 2020. It has a 52-week trading range of $2.11-$57.20 that’s reflective of the massive volatility that it witnessed in 2020.
While these companies saw heightened volatility in 2020, there are some stocks that were less volatile than the broader markets, offering a bit more stability for conservative investors.