High Beta Pain
by Eddy Elfenbein, Crossing Wall Street
There’s been a notable decline in the relative strength of high beta stocks. In English, these are stocks that have more pronounced moves than the rest of the market. So when the market goes up, they go up a lot. When the market’s down, they’re down a lot. Traders like to play high beta names for short-term fun.
There’s an ETF loaded with high beta stocks (SPHB) and it’s been badly lagging the rest of the market even though the broader market has been rather flattish.
Check out this chart:
The SPHB’s relative strength peaked in April, but it’s really crumbled in the last few days.
Copyright © Crossing Wall Street
