Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Advances in Economics, Management and Political Sciences
Series Vol. 2 , 22 March 2023
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Research on the Influence of Covid-19 on U.S. Oil Industry Based on Fama-French 5-Factor Model
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Abstract
This article explores U.S. investors' investment decisions in the oil industry in response to three major events during the COVID-19 pandemic, which are the outbreak of the COVID-19 epidemic, the successful achievement of the Pfizer vaccine, and the end of the COVID-19 epidemic. The data, ranging from January 2019 to November 2022, is processed with Fama-French 5-factor model and the fitting results of the 5-factor model of these four periods of time are derived by multiple linear regression. The significance of each factor of the model will change due to different choices of investors, especially SMB, RMW and CMA. In different periods of the epidemic, investors will not pay attention to the market value, ROE and total asset growth rate of oil companies because of events that are not conducive to the oil industry, such as the US interest rate hike and the Russia-Ukraine war. In addition, investors will also refocus on these indicators when they hear news that is positive for the stock market, such as the successful development of Pfizer's vaccine or a cut in U.S. interest rates. By conducting comparisons and analyses, this article highlights the fluctuations in the stock market within the oil industry. The insights gained from this analysis can prove beneficial for both investors and government officials when formulating policies and making informed decisions.
Keywords
Oil Industry, U.S. stock market, Fama-French Model, COVID-19
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- ISBN (Print)
- ISBN (Online)
- Published Date
- 22 March 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/2/2023019
- Copyright
- 22 March 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited