Latest news with #riskAdjustedReturns

Yahoo

Here are 10 stocks Goldman Sachs expects to be winners after a wild first half for the market

Goldman Sachs just updated one of its stock baskets with its picks for the highest risk-adjusted returns. The basket has outperformed the S&P 500 so far this year, gaining 3% year-to-date. The S&P 500's overall risk-adjusted return has been lower than usual so far this year, strategists said. It's been a volatile year for stock traders, but there are a handful of new winners in the S&P 500 that could be poised for big gains over the next 12 months, according to Goldman Sachs. In a note to clients on Friday, the bank said it updated its Sharpe Ratio basket, a list of 50 stocks with the highest expected risk-adjusted returns. So far, the basket has gained 3% year-to-date, edging past the S&P 500's 1.7% gain. The S&P 500's overall risk-adjusted return has been "lower than usual" so far in 2025, the strategists said, pointing to increased volatility and lower-than-average returns stemming from fears around tariffs. The bank rebalanced its portfolio by choosing stocks with a high prospective Sharpe Ratio, a gauge for risk-adjusted returns calculated by dividing a percentage return to a stock's consensus 12-month price target by its six-month option-implied volatility. "Currently, the median S&P 500 stock is expected to post an 11% return to its 12-month consensus price target with a 6-month implied volatility of 28, yielding a prospective risk-adjusted return of 0.4," the bank wrote. Here are the top 10 newest additions to Goldman's Sharpe basket. Ticker: MRNA Return to consensus price target: 88% Expected return over implied volatility: 1.3 Ticker: VTRS Return to consensus price target: 61% Expected return over implied volatility: 1.5 Ticker: ENPH Return from consensus price target: 45% Expected return over implied volatility: 0.6 Ticker: PCG Return to consensus price target: 45% Expected return over implied volatility: 1.1 Ticker: TMO Return to consensus price target: 42% Expected return over implied volatility: 1.2 Ticker: FI Return to consensus price target: 37% Expected return over implied volatility: 1.2 Ticker: COO Return to consensus price target: 37% Expected return over implied volatility: 1.2 Ticker: CRM Return to consensus price target: 37% Expected return over implied volatility: 1.1 Ticker: LEN Return to consensus price target: 34% Expected return over implied volatility: 0.9 Ticker: EPAM Return to consensus price target: 33% Expected return over implied volatility: 0.8 Read the original article on Business Insider