The 3 Most Volatile Cannabis Stocks
Cannabis is likely to be one of the fastest growing industries over the next five to 10 years. The State of the Legal Cannabis Markets report from Arcview Market Research and BDS Analytics suggests it's an industry that could see worldwide sales nearly quadruple from $10.9 billion to $40.6 billion between 2018 and 2024. Meanwhile, investment bank Stifel has a pie-in-the-sky global annual sales target of $200 billion in place in a decade.
But as investors, we also know that all hot investments suffer through growing pains. This can lead to an emotional roller coaster for investors that translates into cannabis stock share prices being far more volatile than the benchmark S&P 500.
How do we know this? An oft-overlooked metric known as "beta" measures a stock's volatility in relation to the market (often the S&P 500) over a defined time range. For example, a beta of 1 would signify a stock with similar volatility to the S&P 500. Meanwhile, betas of 0.5 and 2 imply companies with half the volatility and twice the volatility, respectively, compared to the S&P 500. The three most volatile cannabis stocks all sport betas that are, at minimum, 267% more volatile than the S&P 500.
Source Fool.com
