The Effect of COVID-19 Increasing Cases on Movement of Stocks

The Coronavirus pandemic that was first identified in China and infected individuals in more than 200 nations around the world has become a very hot research topic recently. A large part of the country's economy is suffering due to the epidemic and most businesses have completely shut down which affected the global economy and the financial market negatively. Many papers study the negative impact COVID-19 on the economy, but our paper studies the possible positive impact of COVID-19 pandemic mainly on the biopharmaceutical and cleaning product stocks. We aim to find the correlation between the daily number of Coronavirus registered cases in the USA on the movements of ten indices. We used Granger causality and Pearson correlation test to investigate the correlation between the number of Coronaviruses registered cases in the USA on the movements of Biopharmaceutical and Cleaning Sector Stocks. Then, we used a linear regression analysis to determine whether a daily number of registered COVID-19 cases can successfully predict companies daily closing price directions. The experimental results indicate that the number of COVID-19 daily cases does cause stock prices to fluctuate and can be used to make valuable investment decisions. Keywords— Granger-causality; COVID-19 Cases; Biopharmaceutical Sector Stocks; Cleaning Product Stocks, Pearson Correlation analysis, Linear Regression Analysis.