Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)

Could Investment Portfolio Ameliorate the Investment Risk and Return Under Covid-19 in the US Pharmaceuticals Industry?

Authors
Fuqing He1, *, , Haojin Liang2, *, , haojin@ualberta.ca, Ziyao Yuan3, *, , zyuan@ucdavis.edu
1Paul Merage School of Business and School of Social Science, University of California Irvine, Irvine, 92697, United States
2Faculty of Science, University of Alberta, Edmonton, T6G 2R3, Canada
3College of Agricultural and Environmental Sciences, University of California Davis, Davis, 95616, United States

These authors contributed equally.

*Corresponding author. Email: fuqingh@uci.edu
Corresponding Authors
Fuqing He, Haojin Lianghaojin@ualberta.ca, Ziyao Yuanzyuan@ucdavis.edu
Available Online 26 March 2022.
DOI
https://doi.org/10.2991/aebmr.k.220307.413How to use a DOI?
Keywords
portfolio; investment; mean-variance; Sharpe ratio; treasury bill
Abstract

To relieve the huge blow to the economy caused by the COVID-19 pandemic, this article is to verify that investment portfolio is an efficient method when investing in the US pharmaceuticals industry by utilizing daily stock prices of 4 out of the top 10 US pharmaceutical companies and treasury bill during the last 2 years (Aug 2019 to Aug 2021). We obtained the monthly rate of return and applied mean-variance strategies to individual companies and portfolios. We drew CAPM and efficient frontier and used the Sharpe ratio as a measurement to test portfolio efficiency. The empirical results are given 3 special portfolios: minimum variance, maximum expected return and maximum Sharpe ratio. The highest Sharpe ratio in portfolios is higher than all single stocks. Portfolios with treasury bills have a higher return, higher risk, and similar Sharpe ratio with portfolios without risk-free rate as treasury bills also experienced a huge shock during the pandemic. According to these results, we can conclude that investment portfolios do help investors alleviate the impact of COVID-19 on the economy and get better returns in the economic downturn.

Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
26 March 2022
ISBN
978-94-6239-554-1
ISSN
2352-5428
DOI
https://doi.org/10.2991/aebmr.k.220307.413How to use a DOI?
Copyright
© 2022 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  - Fuqing He
AU  - Haojin Liang
AU  - Ziyao Yuan
PY  - 2022
DA  - 2022/03/26
TI  - Could Investment Portfolio Ameliorate the Investment Risk and Return Under Covid-19 in the US Pharmaceuticals Industry?
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 2526
EP  - 2536
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.413
DO  - https://doi.org/10.2991/aebmr.k.220307.413
ID  - He2022
ER  -