Stocks Beta coefficient

There are a few strategies adopted by traders or long term investors especially during time of uncertainties like now. The traders would like to ride the volatility on some stocks to make short term profit while the buy and hold investors may prefer to pick some defensive stocks.

But how can we really identify which stock is volatile or which stock is defensive in nature? One of the ways is to look at the Beta coefficient of the stocks. Beta coefficient is a measure of the volatility or systematic risk of a stock in comparison to the market as a whole. It is the reflection of the stock returns in response to the market or the changes in the index.

In short, a stock with Beta coefficient of 1 means the stock returns is the same as the market returns. A higher Beta means the stock is more volatile than the market while a lower Beta means the stock does not react too much on every market changes.

I did a list of 80 stocks which are constituents of ST and ST Mid cap index in ranking of their Beta coefficients. You may ignore those that have coefficient of 0 which is meaningless. Now you know why some people say SMRT, M1 or SPH are defensive in nature. There is no surprise also why the higher Beta stocks are most of the time listed under top volume of the day.

Stock	Beta	Stock	Beta
CHINA HONGXING	2.879	VENTURE	1.153
YANLORD LAND	2.553	SUNTEC REIT	1.143
CHINA SKY	2.545	WHEELOCK PROP	1.136
STX PAN OCEAN	2.224	CAPCOM TRUST	1.129
KEPPEL TELECOM	2.212	HYFLUX	1.123
WILMAR INTL	2.181	HONGKONG LAND	1.120
GOLDEN AGRI	2.132	GUOCOLAND	1.093
SWIBER HOLDINGS	2.118	UOL LTD	1.093
SYNEAR FOOD	2.076	ASCEN REIT	1.083
EZRA HLDGS	2.012	CAPMALL TRUST	1.055
COSCO CORP	1.982	HAW PAR CORP	1.041
DELONG HOLDINGS	1.935	PARKWAY HLDGS LT	1.040
CHINA AVIATN OIL	1.866	PACIFIC CENTURY	1.012
PEOPLE'S FOOD	1.836	SIA ENGR	0.997
BANYAN TREE	1.800	STATS CHIPPAC	0.936
CAPITALAND	1.658	DBS GRP HLDGS	0.921
HOTEL PROPERTIES	1.633	UOB LTD	0.905
NOBLE GROUP	1.618	MACQUARIE PRIME	0.843
KEPPEL LAND	1.581	HONG LEONG FIN	0.836
NOL LTD	1.575	JARDINE STR 500	0.824
STRAITS ASIA RES	1.571	SAT SERVICES	0.803
WING TAI HLDGS	1.511	OCBC	0.800
CDL HOSPITALITY	1.499	SIA LTD	0.757
CHINA FISHERY	1.498	JAYA HOLD LTD	0.751
SGX	1.446	JARDINE C&C	0.749
SEMBCORP INDUST	1.437	MAPLETREE TRUST	0.739
RAFFLES EDU	1.404	SPORE TELECOM	0.732
CHART SEMICON	1.379	ST ENGRG	0.623
ALLGREEN PROP	1.361	JARDINE MATH 400	0.606
GALLANT VENTURE	1.358	COMFORTDELGRO	0.528
KEPPEL CORP	1.355	CEREBOS PACIFIC	0.391
OLAM INTER	1.317	SINGAPORE POST	0.357
GENTING INTL	1.313	STARHUB	0.318
CITY DEVT LTD	1.306	SPORE PRESS HLDG	0.266
SEMBCORP MARINE	1.225	MOBILE ONE	0.212
SPORE LAND	1.219	SMRT CORP	0.206
MACQUARIE INF	1.210	FIRST RESOURCES	0.000
SPORE PETRO-SPC	1.195	INDOFOOD AGRI	0.000
FRASER & NEAVE	1.190	LI HENG CHEMICAL	0.000
MANDARIN ORI	1.175	YANGZIJIANG	0.000