Ruofan Shi
ABSTRACT
During the Covid-19 pandemic period, the U.S. government and the Federal Reserve started a radical monetary simulation plan to save the economy. The current capital market experiences more fluctuation and are more unpredictable. Capital asset pricing tools are more important at such a special time. This article uses the Fama-French five-factor Model and analyzes the clothing industry in the United States from July 2019 to November 2020, separating into pre and post pandemic periods. The regression analysis performed contains five coefficient factors, and each corresponds to a specific property of the clothing industry after Covid-19 emerged. The market factor indicates that the clothing industry is negatively affected by the pandemic. SMB shows that small businesses are more favorable to investors. HML indicates that value stocks are more preferred. RMW shows that investors tend to look for companies with higher profitability, whereas CMA indicates a minimal change to the clothing industry. It is recommended that more attention should be paid to the companies with small-cap, high BM ratio and stable profitability.
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