Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

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Research on the Impacts of Covid-19 on U.S. Medical Industry Based on Fama-French Five Factor Model

Authors
Yunqi Huang1, *, †, Yi Li2, †, Ruolin Wang3, †, Haoran Zhao4, †
1School of Mathematics(Zhuhai), Sun Yat-sen University, Zhuhai 519082, China
2Faculty of Finance, Shanghai University of China, Shanghai 200444, China
3Faculty of Economics, Fudan University of China, Shanghai 200433, China
4Swanson School of Engineering, University of Pittsburgh, Pittsburgh 15260, the United States
†

These authors contributed equally.

*Corresponding author. Email: guanghua.ren@gecacademy.cn
Corresponding Author
Yunqi Huang
Available Online 15 December 2021.
DOI
10.2991/assehr.k.211209.390How to use a DOI?
Keywords
Fama-French Five Factor Model; Covid-19; Medical industry; U.S. stock market
Abstract

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.

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.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
978-94-6239-483-4
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.390How to use a DOI?
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

risenwbib
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  -