Delivering beta — the stocks tracking closest to market

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American Express

The Delivering Alpha conference on Tuesday is hosting a heavy list of Wall Street titans. But if you're not rich enough to pay big hedge fund fees, and you're not smart enough to generate your own alpha like some of the guests at the conference, then we've got a new list of stocks for you, the ones that are delivering beta.

That's right — beta, of course, is the number that shows how closely a stock tracks the overall market. Shares with a beta equaling 1.0 mean that they generally move the same as the market. Stocks with betas of more than 1.0 have more volatility, and beta of less than 1.0 means less volatility.

Among the 10 large sectors, right now it's consumer discretionary that leads the way, tracking the market the closest in the past 50 trading days. That's followed by the industrials and health-care sectors.

Among the Dow 30, only a few stocks are closely tracking the market, based on a 50-day rolling correlation. American Express, 3M and IBM are the most similar to the overall market.

The market right now has gone into a fuzzier period, where correlations and betas have broken down compared to six or 12 months ago. Back then, the markets were moving much more in sync, where generally speaking, all individual stocks tracked each other pretty closely. Right now that's not the case, as individual stocks are all doing their own thing. The "market" is much more an average of a bunch of companies doing all kinds of things, rather than just a single movement that every stock is reflecting.

Good time to be a stock picker

A market with low correlations means this is a good time to be a stock picker. Since there isn't one obvious trend driving everything up and down together, various stocks will each move up and down on the merits of their individual businesses. The traders who like to follow broad trends are stuck right now, because there is no obvious trend to follow. Investors who can accurately separate winners from losers will have a chance to bring in profits for as long as this low-correlation environment exists.

The Delivering Alpha conference is presented by CNBC and Institutional Investor.