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CNBC found that some travel and retail stocks tend to outperform the market when the U.S. is hit by cold wave, which is a rapid fall in temperature during a 24-hour period.
Priceline shares have gained an average of 9.1 percent one month after an official cold wave (as determined by the National Weather Service) strikes since 1997, while Royal Caribbean climb an 7.9 percent. The cold weather likely gets people to travel to warmer locales or at least start planning to do so.
Other stocks that perform well following such weather events are Target and Macy’s. Target’s average return after a cold wave is 6.6 percent, while Macy’s averages a return of 6.3 percent. Warm winters could hurt department stores by leaving a lot of cold weather clothes inventory on the books. The S&P 500 meanwhile, has averaged a return of 2.2 percent in these instances dating back to 1997.
Natural gas stocks, meanwhile, have lagged the market after a cold wave hits the U.S.
Shares of Concho Resources has averaged a decline of 15.2 percent after the last five cold waves dating back to 1997. Newfield Exploration, Chesapeake Energy, and Transocean have also averaged declines of more than 10 percent. Anadarko Petroleum shares, meanwhile, have fallen an average of 9 percent, according to Kensho.
When there is frigid weather, sometimes natural gas companies are forced to close down their wells.
Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.
—CNBC’s Dominic Chu and Gina Francolla contributed to this report.
