When Wall Street Volatility Is At Its Height, You Can Play Ultimate Defense With These Stocks

Due to the ongoing banking crisis, there has been a growing degree of uncertainty in the market, which has enabled investors to look for certain stocks to beat the Street.

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There has been wavering in investor confidence following the collapse of Silicon Valley Bank and Signature Bank. The Cboe Volatility Index (VIX), Wall Street's preferred fear gauge, reached a level that has not been seen since late 2022 and is close to a territory regarded as highly risky by experts. If the current trend continues, the volatility index is likely to rise by another seven points by the end of the month, which would make it the biggest jump in a decade.

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As part of the process of finding volatility winners, Trade Algo screened stocks that tend to rise when the volatility index rises in price. In fact, this is not normal since most stocks fall when there is a great deal of fear on Wall Street, and the VIX rises. Our research consisted of screening more than 1,500 of the largest U.S. stocks and looking at their performance during the 10 biggest monthly moves higher in the VIX over the past decade.

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Stocks that returned were those whose businesses are stable and whose cash flows are steady. Beer, food, and electricity are some of the things that are sold by these companies.

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With a median gain of 4.6%, utility company PG&E topped the list of the biggest risers amidst turmoil on Wall Street, making it one of the biggest gainers this year. A majority of analysts who cover PG&E shares have rated it as a buy, with eight out of the 13 analysts who cover the stock giving it a buy rating. Currently, the stock is trading at $18.73, implying a 17.8% upside from Friday's close price, which implies a price target of $18.73.

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During the past 12 months, shares have rallied almost 42%, after dropping 2% in 2023.

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Coterra Energy is one of the energy groups on the list, while EQT is another.  Among all the stocks on this list, Coterra Energy has the highest median gain of 4.6%. As of today, the shares of Coterra Energy have remained flat in 2023, however, they have gained 6% over the last year. 

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Another example of a stock that is able to beat the market as a whole during times of volatility, is Molson Coors a beer manufacturer. There have been gains of 1.6% to date, and 3% over the past 12 months, since the company's shares were first listed. While analysts are mixed on the stock - with a majority of those covering the stock recommending a hold rating - they predict that shares will have a 4.6% upside over the next year. 

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Among the other consumer names that also made the list were Bath & Body Works, J.M. Smucker, Flowers Foods, and Stride. There has been a median rise of 2.3% for Bath & Body Works over the past year. Since the beginning of 2023, shares of its company have fallen 12%. This follows a decline of 20.3% in the past 12 months as well. The stock, however, is regarded as a buy by analysts who estimate an almost 39% upside over the next year.

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