Research on the Impacts of Covid-19 on U.S. Medical Industry Based on Fama-French Five Factor Model
These authors contributed equally.
- 10.2991/assehr.k.211209.390How to use a DOI?
- Fama-French Five Factor Model; Covid-19; Medical industry; U.S. stock market
Under the dramatic impact of Covid-19, the global economy has decreased sharply, and many countries have experienced negative economic growth during the pandemic. This study uses Fama and French Five-Factor model to investigate the reasons causing these changes and provide referential suggestions on how to invest in stocks of the medical industry during black swan events. Based on the Fama-French five-factor model and data selected from the Center for Research of Security Prices (CRSP), this article explains stocks return in the medical field from May 2019 to February 2020. Specifically, the detailed influence of Covid-19 in health, medical equipment, and drug industries is analysed according to market risk premium, size, book-to-market value, profitability, and investment. The result shows that βMKT becomes larger and βSMB becomes smaller in Health Industry. Meanwhile, βHML in Medical Equipment becomes insignificant and βRMW becomes significant after COVID-19. And the result of drugs shows the βSMB is larger than 1, which indicates investment in a small value company is better. For the whole Medical field, low-profit stock portfolios are profitable.
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Yunqi Huang AU - Yi Li AU - Ruolin Wang AU - Haoran Zhao PY - 2021 DA - 2021/12/15 TI - Research on the Impacts of Covid-19 on U.S. Medical Industry Based on Fama-French Five Factor Model BT - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021) PB - Atlantis Press SP - 2386 EP - 2391 SN - 2352-5428 UR - https://doi.org/10.2991/assehr.k.211209.390 DO - 10.2991/assehr.k.211209.390 ID - Huang2021 ER -