Yield and Volatility of Tesla Stock under the Normalized Covid-19 Pandemic
DOI:
https://doi.org/10.54691/bcpbm.v32i.2902Keywords:
Exchange rate, COVID-19 pandemic, Automobile chip industry, Stock volatility, Stock price fluctuation.Abstract
Due to the changing national and local policies worldwide caused by the raging situation of COVID-19, the car chip supply chain across the world has been impacted severely. This paper assesses the yield and volatility of, an American automobile and clean energy company, Tesla’s stock price with the dreadful COVID-19 pandemic. To study the changes in yield and volatility of the selected stock price with two influencing factors, which are exchange rate (USD to CNY) and automobile chip shortage, a VAR model and an ARMA-GARCH model are used in this research. Empirical results indicate that, during the COVID-19 pandemic, increasing the exchange rate has a negative impact on Tesla’s stock return as well as enlarging its volatility, when the previous stock price has been considered as a significant implication on its hereafter price.
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