Research on Medical Equipment Industry Based on Fama-French Five Factor Model

DOI

10.2991/978-94-6463-488-4_6How to use a DOI?

Keywords

Covid-19; Medical Equipment Industry; Fama-French Five Factor Model

Abstract

The Covid-19 outbreak since 2019 has affected various industries in the United States to varying degrees. While many industries have stagnated, others have been stimulated. This paper focuses on the stock market of medical equipment to explore the impact of the epidemic on the U.S. healthcare field. The data of various industries in the United States from Kenneth R. French’s database was adopted to analyze. By selecting two time periods before and after the epidemic, the parameters were estimated by multiple regression. Based on the CAPM model, Fame-French five-factor model is introduced since it has been tested by more actual data and has a better explanatory ability. By comparing the parameters before and after the epidemic, it was found that all factors were significant before Covid-19, but SMB, CMA, and HML became insignificant after the outbreak. In addition, the impact of the epidemic has even caused many factors to produce an opposite effect. In view of these phenomena, reasonable speculation and explanation are made according to the operation rules of the stock market and the specific characteristics of the medical industry. In conclusion, the epidemic has raised expectations for the healthcare sector, making factors such as the size of firms and the type of stock less significant. The medical equipment industry as a whole grew rapidly during this period, while some investors tended to favor speculative stocks. The increasing number of trades has steadily increased the value of shares.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Junhan Liu
AU  - Nuocheng Wang
AU  - Haowen Yao
PY  - 2024
DA  - 2024/08/29
TI  - Research on Medical Equipment Industry Based on Fama-French Five Factor Model
BT  - Proceedings of the 2024 2nd International Conference on Digital Economy and Management Science (CDEMS 2024)
PB  - Atlantis Press
SP  - 54
EP  - 61
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-488-4_6
DO  - 10.2991/978-94-6463-488-4_6
ID  - Liu2024
ER  -