Liquidity-Driven Strategy Surpasses Benchmark by 137.53% as High-Volume Stocks Outperform Volatile Market Johnson Ranks 404th in 290M Trading

On August 7, 2025, Johnson (JCI) traded with a volume of $0.29 billion, ranking 404th in the market. The stock closed down 0.34%, underperforming broader benchmarks amid mixed sectoral momentum. Liquidity concentration in high-volume names remains a key driver of short-term volatility, as observed in recent market dynamics.

Recent data highlights the performance of a liquidity-focused trading strategy, where selecting the top 500 stocks by daily trading volume and holding for one day generated a 166.71% return from 2022 to the present. This significantly outperformed the benchmark index’s 29.18% return, underscoring the role of liquidity in capturing short-term gains, particularly during periods of heightened market turbulence. Such strategies, however, carry elevated risks due to rapid price swings and macroeconomic uncertainties.

The strategy’s success underscores the importance of liquidity concentration in volatile markets, where high-volume stocks tend to attract momentum-driven capital flows. Investors adopting similar approaches must balance potential returns with the inherent risks of short-term exposure, including regulatory shifts and sector-specific shocks. Market participants are advised to assess liquidity depth and market structure before committing to such tactics.

The backtest results confirm that the strategy achieved a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This emphasizes the role of liquidity concentration in short-term stock performance, particularly in volatile markets.