The VIX index could climb even higher this year, so we looked for some stocks that might trade alongside it.
The VIX index is up 19% over the last two weeks, causing a lot of analysts to raise questions about what seem to be "shaky markets." Sell offs over the intervening period have sent shares of some stocks down as much as 20%.
VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) volatility index. It's been used since 1993 to gauge market volatility by examining index options on the S&P 500.
When a buyer and a seller agree to a price for a basket of stocks ahead of time, the transaction is called an index option. They allow a trader to take advantage of expected market moves. In other words, it tries to approximate how a majority of investors feel about the future.
Because index options are based on what traders think the market will do, and not what it is doing or has done, it is a very forward-looking metric.
Some stocks react positively to higher degrees of market pessimism. For example, as tech-stocks have been pummeled utilities have soared.
Right now only 6 publicly traded companies have been able to keep up with the VIX's massive upward swing. Theoretically, if investors continue to expect shaky markets in the future, then these stocks could continue their upward momentum as well.
Click on the interactive chart to view data over time.
These six plays have been correlating with the VIX index this week. Could they go even higher?
1. Echelon Corporation (ELON, Earnings, Analysts, Financials): Develops, markets, and sells energy control networking solutions primarily in the Americas, Europe, the Middle East, Africa, and the Asia Pacific/Japan. Market cap at $127.82M, most recent closing price at $2.96.
Correlation with the VIX index at 0.625 over the last 60 days.
2. Norwood Financial Corp. (NWFL, Earnings, Analysts, Financials): Operates as the holding company for the Wayne Bank, which provides various commercial banking products and services to individuals, businesses, nonprofit organizations, and municipalities in Pennsylvania. Market cap at $110.03M, most recent closing price at $30.27.
Correlation with the VIX index at 0.509 over the last 60 days.
Correlation with the VIX index at 0.508 over the last 60 days.
4. Uroplasty Inc. (UPI, Earnings, Analysts, Financials): Engages in the development, manufacture, and marketing of products for the treatment of voiding dysfunctions. Market cap at $92.05M, most recent closing price at $4.33.
Correlation with the VIX index at 0.54 over the last 60 days.
5. Wausau Paper Corp. (WPP, Earnings, Analysts, Financials): Wausau Paper Corp. manufactures, converts, and sells paper and paper products in the United States and internationally. Market cap at $654.96M, most recent closing price at $13.25.
Correlation with the VIX index at 0.518 over the last 60 days.
(List compiled by James Dennin. VIX correlations sourced from Google Finance; monthly returns from Zacks Investment Research.)
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Echelon Corporation(ELON, Chart, Download SEC Filings)
- Norwood Financial Corp.(NWFL, Chart, Download SEC Filings)
- Sun Communities Inc.(SUI, Chart, Download SEC Filings)
- Uroplasty Inc.(UPI, Chart, Download SEC Filings)
- Wausau Paper Corp.(WPP, Chart, Download SEC Filings)
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