If you’re in the market for stocks, you may wonder which stocks fluctuate the most. Here are three examples: Low-liquidity stocks, semiconductor stocks, and Cash and carry stocks. All three companies have their unique characteristics, which may affect the fluctuation of their stock prices.
Low liquidity stocks
Low-liquidity stocks are those that have the lowest trading volume. The reason for this is that traders are less likely to sell their shares at low prices. Therefore, they are susceptible to price manipulation and pump-and-dump scams. Many unscrupulous brokers and salespeople target these stocks to entice unsuspecting individual investors to buy them. This practice is harmful to individual investors because such stocks have little demand and are thus easy targets for scammers.
A chart of stock liquidity can help identify which stocks are at risk of price volatility. A stock with low liquidity will fluctuate more. This is because low liquidity will make it difficult for buyers and sellers to complete transactions. Stocks with high liquidity increase in quoted value more than lower-liquid stocks.
There are three types of market capitalisation portfolios, with the three largest exhibiting the highest liquidity co-movements and the smallest among small caps. Similarly, liquidity co-movements are least intense among small caps and most extreme in large caps. Across the market capitalisation portfolios, the proportional effective spread quoted spread, and average 1 have positive correlations. However, the magnitude of the correlation among these three liquidity measures is not statistically significant.
The beta coefficient measures the volatility of On Semiconductor stocks. This measure shows how quickly the price changes in a benchmark index or a chosen market. The beta coefficient of On Semiconductor is 2.07, a positive value that means the stock will outperform its benchmark in the long run.
While the semiconductor industry is extremely volatile, a few semiconductors companies have firmly established positions in their markets. These include NVIDIA, Broadcom, Intel, Skyworks Solutions, and TSMC. NVIDIA, for example, makes graphics processing units (GPUs) that are indispensable for data centres and artificial intelligence. In addition, GPUs are crucial to mining cryptocurrencies such as Bitcoin and Ethereum. This makes it a top semiconductor stock for investors.
The semiconductor industry has suffered a difficult downturn this year. I expect the CHIPS Act to provide a boost to the industry, but it will take time for the benefits to flow in.
Cash and carry
It is important to research stocks before investing in them. This is because stocks can fluctuate a lot, especially when there are a lot of pump and dump schemes. A list of companies on the S&P 600 is also a good reference. This will give you a good idea of which companies are likely to increase in value.
Alterity Therapeutics Limited
Alterity Therapeutics Limited (NASDAQ: ATER) is a biotech company developing a treatment for Parkinson’s disease. The company also has an antimicrobial drug called PBT2, which is an important drug target for the company. The company’s stock price fluctuates most when news about the company hits the news. However, a positive news story can push the stock price higher.
The biotechnology company Alterity Therapeutics Limited is involved in several research collaborations for the development of a novel treatment for neurodegenerative diseases. It has an advanced drug candidate for Parkinson’s disease and Alzheimer’s disease. Its lead drug candidate is being developed for these conditions, and the company is also exploring new drug candidates.
The market value of Alterity Therapeutics varies from the intrinsic value, which is the value recorded on the company’s balance sheet. Investors use different methods to determine the intrinsic value of a stock. They buy the stock if its market price falls below its intrinsic value. Because the market value and intrinsic value can vary significantly, it is important to use multiple sources of information when analyzing the stock.