Most analysts are expecting a rate cut this year, but it really depends on the path of the economy. Thus, the market will remain volatile, prompting an urgent need to build a portfolio of low-beta stocks. These securities are projected to deliver solid returns while offering protection against unpredictable market conditions.

In this regard, stocks like The Progressive Corporation PGR, Booz Allen Hamilton Holding Corporation BAH, Trip.com Group Limited TCOM and Stride Inc. LRN are worth betting on.

Understanding Beta

Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.

If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.

For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.

Screening Criteria:

We have taken a beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters that can add value to the portfolio.

Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.

Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.

Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.

Zacks Rank Equal to 1: Zacks Rank #1 (Strong Buy) stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are four of the 15 stocks that qualified for the screening:

In the domestic market, The Progressive Corporation is among the largest auto insurers. The company continues to bank on increasing net earned premiums and is expected to witness earnings growth of 49.4% this year.

Booz Allen Hamilton Holding is a leading provider of management and technology consulting, analytics, engineering and digital solutions. In the federal defense and civil markets, the company is witnessing excellent organic revenue growth.