Abstract

The purpose of this study is to determine whether the COVID-19 pandemic has affected different aspects of the stock market at different magnitudes. During the current pandemic, certain industries seem to perform better than others, raising the question of whether all stock market sectors are affected equally by the coronavirus recession. In addition, past stock market trends have shown that in the case of an economic drop, small cap stocks tend to be more affected than large cap stocks. To determine whether these observations have any statistical significance during the COVID-19 economic chaos, this study looks at whether different sectors of the stock market and stocks of varying sizes are affected differently by the global pandemic. For the first analysis, data was collected by randomly sampling ten stocks from each sector. Following data collection, the average percent decrease of stock price for each sector’s stocks was compared. It was determined that there was a statistically significant difference between the average percent decrease of stock prices in different sectors. Results of this test suggest that the COVID-19 pandemic affected some sectors more than others. For the second portion of this analysis, data was collected on the ten largest cap and ten smallest cap stocks of each sector. The average percent decrease of the ten largest and smallest cap stocks were compared. Six out of eleven sectors were found to be statistically significant, implying that there is a discrepancy between the average percent decrease of stock price between the large and small cap stocks. This result suggests that in more than half of the sectors, larger-cap stocks were affected at a different percentage than smaller cap stocks, specifically that the smaller cap stocks were hit harder than the larger cap stocks.