Using Index model and Markowitz Model to analyze the Results of Retail Industries Before and After the Covid-19 Virus Outbroke

Abstract

Since covid-19 outbroke in January 1st ,2020, many disasters happened in these two years, for example medical resources are in short supply for every patient. All those disasters caused chaos in all over the world, so caused investors lost confidence in financial market. The prices of stocks were dropped so rapidly, almost all markets influenced by covid-19 virus. This paper will focus on retail industries which have close connection with consumers lives, anyone cannot live without them. People still have faith in retail industries, but still these industries had impact from covid-19. To compare the changes of retail industries before covid-19 virus with after covid-19 virus, I used Index model and Markowitz Model computed their results, stand deviation and Maximum Sharpe ratio. From the results, it is no hard to tell risk of retail industries were small, their standard deviations all between 0% to 15% no matter before or after covid-19 virus, which can help investors strengthen confidence and did not lost money. In conclusion, if retail industries can complete transformation, they only be impacted by a short time and become great portfolio for investors.