High-Volume Strategy Surges 166.71% Since 2022 Outperforming Benchmark by 137.53% as Liquidity-Driven Momentum Shines Despite Mid-Tier Stock Rankings

On August 11, 2025, Becton Dickinson (BDX) traded with a volume of $530 million, a 29.99% decline from the prior day, ranking it 184th in market activity. The stock closed down 0.52% amid mixed sector sentiment.

Backtesting of a high-volume trading strategy revealed significant performance disparities. A portfolio constructed by purchasing the top 500 stocks by daily trading volume and holding for one day generated a 166.71% cumulative return since 2022. This far exceeded the benchmark index’s 29.18% gain, highlighting a 137.53% outperformance. The results suggest that liquidity concentration in high-volume equities can drive short-term price momentum, particularly in volatile environments where trading activity amplifies market responses.

The strategy’s success underscores the interplay between liquidity and market dynamics. Stocks with elevated trading volumes often attract institutional activity and algorithmic trading, creating self-reinforcing price trends. In turbulent markets, where liquidity can evaporate rapidly, maintaining exposure to highly traded names may offer relative stability and enhanced return potential compared to broader market benchmarks.

The backtest findings align with historical patterns observed in liquidity-driven strategies. By focusing on the top 500 volume stocks, the approach leverages the compounding effect of frequent trading, which can magnify returns through tighter bid-ask spreads and reduced slippage. This methodology, however, remains subject to market structure shifts and regulatory changes that could alter liquidity dynamics.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This underscores the role of liquidity concentration in short-term stock performance, particularly in volatile markets.