What Stocks Rise In October?

September and October are notoriously weak periods for the stock market. Indeed, October is famous for its many crashes from the most famous in 1929 to the more recent plunge in 1987.

So we wanted to research what stocks rise in October to find out if any appetizing investment opportunities exist, or whether it’s best to stand on the sidelines during two of the weakest months of the year, on average.

As it happens, we identified three stocks that usually go up in October and feature them below.

What Stocks Rise In October?

Three stocks that usually go up in October are Texas Capital Bancshares (NASDAQ:TCBI), LyondellBasell Industries (NYSE:LYB), and Koppers Holdings (NYSE:KOP), which rise on average by 5.66%, 5.24%, and 3.94% respectively.

We delve into more detail by how much each of these stocks rises, and what the historical probabilities of them rising has been. But first, we’ll note that we’re conducting this analysis in early September and analyzing what stocks rise over the next 7 weeks, so the period includes the final 3 weeks of September and the full month of October. 

TCBI Has Gone Up In 16 of Past 20 Years

The first stock on the list is Texas Capital Bancshares (NASDAQ:TCBI), which has a historical tendency of rising 80% of the time over the next 7 weeks through to the end of October. That figure factors in all data since the share price started trading.

On average, the share price has risen by 5.66% during this period. So in 16 of the past 20 years, TCBI has risen by a statistically meaningful amount.

For comparison, when we ran that same analysis on the S&P 500 over the same time period, the result was a very modest 0.24% rise.

LYB Has Way Outperformed The S&P 500

Next on the list is LyondellBasell Industries (NYSE:LYB), which has a 13 year history and gone up in 10 of those years, corresponding to a 76.9% historical probability of rising during through to the end of October.

In the years when it does rise, it has averaged a gain of 5.24%, again far outperforming the track record of the bellwether S&P 500 index.

As an investor the opportunity and opportunity cost need to be carefully considered during this period because a decision to stick with the major market index, the S&P 500, which should in theory be more diversified and hold up better when sentiment sours, appears to be a losing bet relative to the typically higher risk single stock selection.

Certain stocks tend to outperform and different times of the year, and it’s somewhat intuitive to understand why in specific situations. For example, a swimming pool manufacturer may outperform ahead of the demand boost for their services that comes in Spring, or a retailer may outperform in the months before the holiday season sales bonanza.

In other cases, it’s less clear why the seasonal outperformance occurs relative to the market, but a twenty year track record, as in the case of Texas Capital Bancshares (NASDAQ:TCBI) is a compelling dataset that is not worth skimming past, or ignoring.

KOP Is Up In 13 Of Past 17 Years

Last on our list of relative outperformers is Koppers Holdings (NYSE:KOP). 

By no means is KOP a household name but that shouldn’t be a deterrent from considering it carefully, particularly at this time of year because it has an intriguing track record also. 

Over the coming 7 weeks, Koppers Holdings share price has gone up in 13 of the past 17 years, corresponding to a 76.47% accuracy rate.

When it does go up, its history of success suggests an average rise of 3.92% is possible.

How Did We Find Stocks That Rise In October?

When we ran the numbers to find stocks that have a tendency to go up in October, we had a strict cut off of 75%, meaning that, on average, a stock had to rise in 3 of every 4 years of its trading history during the next 7 weeks through to the end of the month of October.

If it fell short of that criterion, we eliminated the stock from our dataset. Or in other words, it simply didn’t make the cut.

Now you might be wondering if any other stocks beyond the 3 listed above made the cut. The simple answer is no. Only 3 stocks among the universe of all stocks we examined, including S&P 500, NYSE, Russell 2000 and so on, rallied 75% of the time or more over the next 7 weeks. That dataset includes the likes of Apple, Meta, Alphabet, Netflix, Nvidia, and all other big name stocks and technology titans with which you might be familiar.

The takeaway is clear that the next 7 weeks is a historically weak time for the overall stock market and its individual constituents, and very, very few stocks have a proven track record of rising by an amount that comparatively blows away the major market indices. 

Nevertheless, we identified three stocks with a history of rising, on average, in October more than 75% of the time: Texas Capital Bancshares (NASDAQ:TCBI), LyondellBasell Industries (NYSE:LYB), and Koppers Holdings (NYSE:KOP).

Will they do so again? We’ll be watching closely to see if historical track records come to fruition again.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.