Analysis of Four Technology Related Industries Before and After COVID-19 Based on Fama-French Five-Factor Model
These authors contributed equally.
- DOI
- 10.2991/assehr.k.211209.462How to use a DOI?
- Keywords
- Fama-French Model; COVID-19; Technology-related Industry; Investment Strategies
- Abstract
The COVID-19 devastated the U.S. economy dramatically, which broke the largest shrank record from 1947. The U.S. stock market faced a series of huge fluctuations during the pandemic. Due to more stimulated injection policies and online communication demands, the U.S. technology industry faced a structural bull market in 2020. Given that technology-related industries are critical to a country’s development, it is worthwhile paying more attention to the impact of the unprecedented COVID-19 outbreak on those industries, especially how assets are priced differently before and after the outbreak. This study investigates and evaluates changes in the Fama-French Five-Factor Model factors before and after the COVID-19 outbreak for four crucial US technology-related industries (namely hardware, software, chips, and lab equipment industries), which provides suggestions regarding investment strategies of the four industries according to the findings. In addition, the Data from the Kenneth R. French Data Library were used to conduct multiple linear regression. The result demonstrates that the pandemic has profoundly impacted these industries, which can be embodied by the change in significant factors (CMA, RMW, HML) in each market, respectively. In contrast, there is no change in significant factors in the lab equipment industry. In conclusion, COVID-19 has altered both the magnitude and significance of multiple Fama-French Five-Factor Model factors for the industries, and investors should adjust their investment strategies accordingly when investing in different industries to benefit from higher stock returns.
- Copyright
- © 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 - Jiaying Li AU - Xinyuan Wang AU - Junxing Zhou AU - Yuanhao Zhou PY - 2021 DA - 2021/12/15 TI - Analysis of Four Technology Related Industries Before and After COVID-19 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 - 2846 EP - 2852 SN - 2352-5428 UR - https://doi.org/10.2991/assehr.k.211209.462 DO - 10.2991/assehr.k.211209.462 ID - Li2021 ER -