AlphaRank Top Stocks – Less Risk, More Return

Low-beta stocks have continued to outperform high-beta stocks over the long term, challenging CAPM's assumption that greater market risk should earn greater returns.

• CAPM links expected returns to market risk, with beta measuring a stock's sensitivity to the equity market; a beta of 0.5 implies roughly half the market movement, while a beta of 2.0 implies twice the movement.
• Accelerate tested monthly-rebalanced low- and high-beta portfolios in North American markets and found that the anomaly remains present, although it does not work in every year or market environment.
• In the United States, low-beta stocks beat high-beta stocks by 6.5% per year from 2006 to 2024 and by more than 10% in 2025, while performance between the groups was nearly even in the current year.
• In Canada, low-beta stocks outperformed high-beta stocks by nearly 4% per year from 2006 to 2024, but underperformed them in 2025 and year-to-date.
• Accelerate attributes the anomaly to investor demand for lottery-like high-beta stocks, leverage constraints and limits to arbitrage, and recommends using low beta within a broader multi-factor model rather than as a standalone rule.
• Its current model ranks RingCentral as an outperform candidate with an AlphaRank score of 99.8/100 and an 8.1% free-cash-flow yield, while Beyond Meat receives a 0.0/100 score amid declining revenue, weak margins and negative operating cash flow.

Takeaway: Portfolio managers may improve the risk-reward profile by combining long low-beta exposure with short high-beta exposure or other factors, but the recent Canadian underperformance and near-even current-year results show that the signal is regime-dependent.