Empirical Analysis of the Chinese Medical Industry Based on CAPM: before and after the COVID-19 Outbreak
Abstract
The sudden outbreak of COVID-19 has affected the global greatly, and the medical industry has played a very important role in fighting against the epidemic. This paper aims to test the applicability of the medical industry to the CAPM model and the overall risk tolerance of the industry, which is of vital significance for promoting the Chinese medical industry. To explore the reason for changes in medical companies under extreme stress, stocks of listed medical companies from January 2018 to December 2021, covering the period before and after the outbreak, are selected. By using the time series method to analyse, empirical results show a positive linear correlation between risks and benefits. With the development and reform of China's stock market, the CAPM model now has a better explanatory ability for the overall expected return of stocks of medical listed companies. However, due to the strong assumptions of the CAPM model, it fits poorly when occurring emergency.
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DOI: http://dx.doi.org/10.18686/fm.v8i1.6349
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