To determine the ranking, Morningstar compares a stock against its peers in the same 2-digit SIC industry code. We add the stock’s performance during each bear market month over the trailing five years to reach a cumulative bear-market return. Based on these returns, stocks are then assigned a decile ranking where the 10% of stocks with the worst performance receive a ranking of 10. The 10% of stocks with the best performance receive a ranking of 1. Because Morningstar employs the trailing five-year time period for this statistic, only stocks with five years of history are given a bear-market ranking.
Benefit
This statistic enables investors to gauge a stock’s potential performance when the market performs poorly.
Origin
Morningstar calculates this statistic in-house.
See Also
Bear Market Rank (for Funds)