Top 500 High-Volume Stocks Strategy Outperforms Benchmark by 137.53% with 166.71% Return in Volatile Markets

On August 20, 2025, Halliburton (HAL) closed with a 0.05% decline, trading at a daily volume of $230 million—a 45.94% surge from the previous day. The stock ranked 448th in trading activity among listed equities, reflecting heightened short-term market attention.

Recent market dynamics highlight the significance of liquidity concentration in driving short-term performance. Strategies focusing on high-volume stocks have historically demonstrated resilience in volatile environments, as seen in a 166.71% cumulative return since 2022 when targeting the top 500 stocks by daily trading volume. This outperformed a benchmark index by 137.53%, underscoring the potential of liquidity-driven approaches in capturing market momentum.

However, such strategies are not without risks. Periods of sharp drawdowns, including a -4.20% loss in September 2022, emphasize the need for robust risk management. Traders employing these tactics must balance the allure of average daily gains (0.98%) with the inherent volatility of high-turnover assets. The approach remains most suited for short-term traders navigating dynamic market conditions rather than long-term capital preservation strategies.

The strategy of purchasing the top 500 stocks by daily trading volume and holding for one day from 2022 to now delivered a 166.71% return, 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.