Regular readers may be aware that I have been evaluating the Nifty Low Volatility Indices quite often in the recent past. Here are twenty stocks from the Nifty 100 with consistently low price volatility over the last three years.
There are two NSE low volatility indices: (1) 50 NSE stocks that have the lowest price volatility form the Nifty Low Volatility 50. (2) 30 stocks that have the lowest price volatility among the Nifty 100* form the Nifty 100 Low Volatility 30. * Nifty 100 or N100 is a list of 100 stocks with highest market capitalization on the NSE.
For this study, I have considered the current list of 100 stocks from N100 and evaluated daily returns over three periods:
A: July 3rd 2017 to July 3rd 2018
B: July 2nd 2016 to July 2nd 2017
C: July 1st 2015 to July July 2106.
The standard deviation of the daily returns is then calculated. This tells us how much each return varies from the mean. This is a measure of volatility. Higher the standard deviation, the higher the price will move up and down. Our aim is to hunt for stocks with the least volatility. Why? Because it works! That is why. See: Picking Stocks With Low Volatility: A simple, but effective strategy?
Two of the five test stocks portfolios are based on low volatility: Lazy Investing: Five Test Stock Portfolios -July 2018 Update
So after computing the volatility (standard deviation) for period A above, I sorted it in terms of increasing volatility and listed the top 30 stocks. Then I compared the list with current stocks in the Nifty 100 Low Volatility 30. Only 7 stocks were different in the two lists. This is pretty good considering I do not know the period NSE has used for calculation.
|Period A: 2018-2017||Period B: 2017-2016||Period C: 2016-2015|
|ABB India Ltd.||Dr. Reddy’s Laboratories Ltd.||ACC Ltd.|
|ACC Ltd.||ACC Ltd.||Ambuja Cements Ltd.|
|Ambuja Cements Ltd.||Bajaj Auto Ltd.||Asian Paints Ltd.|
|Asian Paints Ltd.||Bosch Ltd.||Bajaj Auto Ltd.|
|Bajaj Auto Ltd.||Britannia Industries Ltd.||Britannia Industries Ltd.|
|Bosch Ltd.||Cipla Ltd.||Cipla Ltd.|
|Britannia Industries Ltd.||Coal India Ltd.||Colgate Palmolive (India) Ltd.|
|Colgate Palmolive (India) Ltd.||Colgate Palmolive (India) Ltd.||Dabur India Ltd.|
|Dabur India Ltd.||Dabur India Ltd.||Grasim Industries Ltd.|
|HDFC Bank Ltd.||HCL Technologies Ltd.||HDFC Bank Ltd.|
|Hero MotoCorp Ltd.||HDFC Bank Ltd.||Hero MotoCorp Ltd.|
|Hindustan Unilever Ltd.||Hero MotoCorp Ltd.||Hindustan Unilever Ltd.|
|Housing Development Finance||Hindustan Unilever Ltd.||Housing Development Finance|
|I T C Ltd.||Housing Development Finance||I T C Ltd.|
|IndusInd Bank Ltd.||I T C Ltd.||IndusInd Bank Ltd.|
|Kotak Mahindra Bank Ltd.||IndusInd Bank Ltd.||Infosys Ltd.|
|Larsen & Toubro Ltd.||Infosys Ltd.||Kotak Mahindra Bank Ltd.|
|Mahindra & Mahindra Ltd.||Kotak Mahindra Bank Ltd.||Mahindra & Mahindra Ltd.|
|Marico Ltd.||Larsen & Toubro Ltd.||Marico Ltd.|
|Maruti Suzuki India Ltd.||Mahindra & Mahindra Ltd.||Maruti Suzuki India Ltd.|
|MRF Ltd.||Marico Ltd.||NTPC Ltd.|
|NTPC Ltd.||Maruti Suzuki India Ltd.||Oil India Ltd.|
|Pidilite Industries Ltd.||NTPC Ltd.||Oracle Financial Services Software|
|Power Grid Corporation of India Ltd.||Oracle Financial Services Software||Pidilite Industries Ltd.|
|Procter & Gamble Hygiene & Health||Pidilite Industries Ltd.||Power Grid Corporation of India Ltd.|
|Reliance Industries Ltd.||Power Grid Corporation of India Ltd.||Procter & Gamble Hygiene & Health|
|Tata Consultancy Services Ltd.||Procter & Gamble Hygiene & Health||Reliance Industries Ltd.|
|UltraTech Cement Ltd.||Reliance Industries Ltd.||Tata Consultancy Services Ltd.|
|Wipro Ltd.||Siemens Ltd.||UltraTech Cement Ltd.|
|Zee Entertainment Enterprises Ltd.||Tata Consultancy Services Ltd.||Wipro Ltd.|
So here are the Twenty Stocks With Consistently Low Price Volatility
|Britannia Industries Ltd.|
|Colgate Palmolive (India) Ltd.|
|Dabur India Ltd.|
|HDFC Bank Ltd.|
|Hero MotoCorp Ltd.|
|Hindustan Unilever Ltd.|
|Housing Development Finance|
|I T C Ltd.|
|IndusInd Bank Ltd.|
|Kotak Mahindra Bank Ltd.|
|Mahindra & Mahindra Ltd.|
|Maruti Suzuki India Ltd.|
|Pidilite Industries Ltd.|
|Power Grid Corporation of India Ltd.|
|Procter & Gamble Hygiene & Health|
|Reliance Industries Ltd.|
|Tata Consultancy Services Ltd.|
Even I know that this is a decent shortlist to start digging further. Of course these many are expensive stocks. So what? Good quality comes at a price!
Please note that low volatility does not mean that the price has gone up in the periods considered. The price could not have moved much or gone south too. Low volatility could mean one or more of the following: the trading volumes are steady and do not fluctuate much. There has not been any market-wide dip in the periods calculated. The companies have neither had good news or bad news. Or they have had only good news or only bad news.
My point is, consistently low volatility does not make a stock an automatic “good buy”. It only means it is worth looking further. So please view this list as an information and do your research before committing money.
To analyze the stocks further use these sheets:
To get the stock price history, use the stock code mentioned in the “full list” sheet and plug into the analyzer sheet. The stock prices used in this article were obtained from Moneycontrol. They are adjusted for splits but not for dividends.
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google PlusandPinterest
Do check out my books
Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)