The Impact Of COVID-19 On Electronic Industries Based on Fama-French Five-factor Model

Author:

Dai Chenchun,Lin Zicheng

Abstract

COVID-19 has influenced almost every country in various aspects, especially the worldwide economy. As it is foreseeable that the epidemic will still last in the next few years, it’s important to analysis the impact of COVID-19 on the common model used in stock analysis. In this paper, we chose 7 years daily data form four companies of electronic industry (from Jan,1st 2015 to Nov,30 2021) in specific to quantitatively evaluate the effects based on Fama-French five-factor model. Through comparing the Fama-French five-factor coefficients in the first 5 years and the next 2 years, one sees that those economy factors are affected by COVID-19. By processing the 7 years data, the results of two groups are obtained. The test of correlation coefficient, t test, p value test and other tests are applied to exam the result and to see whether the model still suit for present stock market. Subsequently, we focused on the changes in each coefficient, combined with the profit and market, to analyses the performance of different factors. According to the analysis, some of the factors were sharply increased the influence on excess return rate like SMB on HPQ, HML on AAPL, etc. Other factors basically remained the same as before. These results shed light on the reaction on electronic industry in the COVID-19 and pave a path for investors’ decisions.

Publisher

Boya Century Publishing

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