Recently, markets have reminded us that despite some stabilization following the shock of the “Liberation Day,” uncertainty still lingers, albeit at more modest levels—for now. For this reason, we continue to seek stocks that demonstrate resilience to potential market disruptions. PSIMON currently categorizes eight of the eleven sectors within the S&P 500 under the moderate-volatility regime (Regime 2), while three sectors remain in the low-volatility regime (Regime 1). As illustrated by the area plot accompanying the following graph, the number of sectors in Regime 2 fluctuates at levels generally lower than those witnessed at the beginning of the year. Thus, PSIMON signals that while all sectors have exited the high-volatility regime (Regime 3), we believe that caution remains warranted.

To identify stocks that currently exhibit greater stability, we focus on the sector where PSIMON forecasts outperformance relative to the S&P 500 (Relative Forecast) while remaining within a low-volatility regime (Regime 1). The financial sector (XLF) stands out as it has been in Regime 1 for the longest duration, with PSIMON maintaining its prediction of outperformance against the S&P 500 for 31 consecutive days.

Within the financial sector (XLF), PSIMON identifies Visa (V) as the company for which its forecasted outperformance relative to the S&P 500 carries the highest level of conviction (Relative Forecast Conviction Rank). Furthermore, this stock has remained in the low-volatility regime for 17 consecutive days, aligning perfectly with the criteria we previously employed to pinpoint the financial sector.

We also consulted a new version of our Market Landscape page, which will soon be available to users. This updated page includes, among other features, a new metric tentatively called “Risk Score” (the final name is subject to change). This metric leverages risk-adjusted returns (inspired by the Sortino ratio) associated with the current regime. The accompanying snapshot indicates that Visa’s Score Rank is currently positioned as the third highest among the stocks within the S&P 500 tracked by PSIMON.

Since October 2024, Visa has consistently demonstrated strong upward momentum, as highlighted by PSIMON’s Asset Analyzer page. The equity curve reveals that Visa has remained above its 200-day moving average without interruption. The price experienced a temporary correction during the market disruptions of March and April; however, it has since rebounded decisively from its lows. Currently, Visa resides firmly within its low-volatility regime (Regime 1), signaling stability and potential resilience against broader market fluctuations.

Furthermore, at the bottom of the same page, PSIMON provides several metrics associated with different sub-regimes of Visa (Regimes 1, 2, and 3 are subdivided to highlight bullish periods indicated by “A,” e.g., R1A, and bearish periods indicated by “B,” e.g., R1B). The first metric we examine is “Days in Regime,” which helps determine whether a sub-regime contains sufficient data points for derived metrics to be statistically robust. The two sub-regimes that stand out are R1A and R2A. Over the past year, the R1A sub-regime (the one Visa is in right now) has delivered an annualized Sharpe Ratio of 2.82, which compares favorably to a buy-and-hold strategy yielding a Sharpe Ratio of 1.55. Notably, this Sharpe Ratio was achieved while being invested approximately 39% of the year, allowing capital to be redeployed elsewhere during the remaining 61% of the time.

In summary, thanks to the information provided by PSIMON, we were able to identify a stock worthy of further analysis in just 5 to 10 minutes.

PSIMON’s AI-Driven signals enable investors to quickly identify promising stocks and ETFs in any type of market conditions. Visa (V) is yet another example of a stock that is worth a closer look.