Prices of the crisis : The impact of COVID-19 on stock-market performance of Finnish export companies

The world has faced an increasing amount of market shocks and crises in recent years, causing market turbulence. The uncertainty due to volatility has raised risks in the stock market. The outbreak of the Coronavirus pandemic caused the stock market crash around the world. The impact of the pandemic on the economy was unprecedented, it simultaneously affected supply and demand. It was assumed that the global restrictions and closure measures would depress export markets for an extended period due accumulate disruptions in supply chains. The aim of the research is to study the impact of COVID-19 on the stock market performance of Finnish export companies and to research effects from the perspective of behavioural finance. The quantitative study is divided into four parts to examine the overall effect on the stock market performance, correlations, volatility, and the impact of news on the development of share prices. The theoretical section creates a foundation for analysing the results of the qualitative research. It incorporates literature on exports, stock market performance of export, COVID-19 and its role in trade and investment, and behavioural finance. Stock market data from the research period, 2019.01.02.– 2021.12.30. was used as data. The most meaningful event was on week eight in 2020, after Italy had announced that a significant chain of infections was detected in Northern Italy, leading to a stock market collapse. The decline was almost correlative among markets, plummeting values an average of 30%. The fall lasted four weeks, halting in week 11, as uncertainty reached its top, and trading was levelled off to a week-long stagnation. Global announcements of corporate support packages restored investor confidence setting markets in motion and leading stock prices to rise. The extraordinary correlation between the economy and contagion events weakened over time. The results of this master’s thesis connected share correlations with negative news, such as the outbreak of new waves. Fear and uncertainty dominated market performance. It establishes that volatility was primarily due to people's reactions to the pandemic. Reversion of values overall was rapid, pointing out that long-term or permanent damage did not occur. The research noted the emergence of a disconnect between the performance of stock markets and the real economy. The market did not function efficiently, highlighting behavioural finance's role and the assumption of irrational investor behaviour, which is influenced by psychological and behaviouristic factors. The study identified hasty generalisation, loss aversion, anchoring, confirmation, recency, and herding biases among these factors. Negative emotions were found to cause a significantly stronger reaction than positive emotions.Maailma on kohdannut viime vuosina kasvavassa määrin markkinashokkeja sekä kriisejä, jotka ovat ravisuttaneet sijoitusmarkkinoita. Ailahtelevuudesta syntyvä epävarmuus on kasvattanut markkinariskejä. Koronaviruspandemian puhjettua pörssit syöksyivät globaalisti laskuun. Pandemian vaikutus talouteen oli ennennäkemätön, se vaikutti yhtäaikaisesti tarjontaan sekä kysyntään. Globaalien rajoitusten sekä sulkutoimenpiteiden arveltiin lamaannuttavan vientimarkkinat ja vaikutusten kestävän vielä pitkään pandemian jälkeen. Tutkimuksen tavoitteena on tutkia suomalaisten vientiyritysten pörssikurssien kehitystä pandemian aikana sekä tutkia markkinareaktiota sijoittajapsykologian näkökulmasta. Teoriaosuus luo pohjan kvantitatiivisen tutkimuksen tulosten analysointiin. Teoria käsittelee sijoittajapsykologiaa sekä pandemian vaikutusta ulkomaankauppaan, osakemarkkinoihin ja Suomen vientiin. Aineistona on käytetty aikaisempia tutkimuksia, vakiintuneita teorioita, virallisia raportteja sekä tilastoja. Kvantitatiivinen tutkimus koostuu neljästä erillisestä tutkimuksesta, jotka tutkivat yleisvaikutusta, korrelaatioita, volatiliteettia sekä uutisten vaikutusta osakkeiden hintojen kehitykseen. Aineistona käytettiin pörssidataa tutkimusjakson ajalta, 2.1.2019-30.12.2021. Tämän pro gradun tulokset osoittavat, että pandemialla oli selkeä vaikutus vientiyritysten osakkeiden hintakehitykseen. Merkittävin tapahtuma ajoittui viikolle kahdeksan vuonna 2020, kun Italia oli ilmoittanut laajasta tartuntaketjusta. Pörssikurssit ajautuivat korreloivaan pudotukseen, menettäen keskimäärin 30 % arvoistaan. Lasku jatkui kuukauden ja pysähtyi vasta viikolla 11, kun epävarmuus saavutti huippunsa ja kaupankäynti taantui viikon mittaiseen stagnaatioon. Globaalisti ajoitetut ilmoitukset yritysten tukipaketeista palauttivat sijoittajien uskon johtaen kaupankäynnin jatkumiseen ja pörssikurssien nousuun. Osakkeiden välinen poikkeuksellinen korrelaatio jatkui hiipuen tutkimusjakson loppua kohden. Korrelaatiota selittävät negatiiviset uutiset, kuten uusien aaltojen puhkeaminen, jotka saivat markkinat kollektiivisesti varautumaan vastaavaan pudotukseen kuin marraskuussa. Pelko ja epävarmuus hallitsivat hintakehitystä, mutta korrelaatio talouden ja tartuntatapahtumien välillä heikkeni ajan kuluessa. Tutkimus osoittaa, että osakkeiden hintavaihtelu johtui enimmäkseen ihmisten reaktiosta pandemiaan. Arvojen palautuminen oli nopeaa, ylittäen pandemiaa edeltäneet huippunsa osoittaen, ettei pitkäaikaista tai pysyvää haittaa syntynyt. Pörssikurssit olivat irtaantuneita todellisesta arvosta, eivätkä markkinat toimineet tehokkaasti. Vahvistaen käyttäytymistieteellisen rahoituksen oletusta sijoittajien irrationaalisesta käyttäytymisestä, johon vaikuttavat psykologiset ja behavioristiset tekijät. Tutkimus tunnisti näistä tekijöistä liiallisen yleistämisen, tappiokammon, ankkuroinnin, vahvistusharhan sekä lauma-ajattelun vaikutuksen hintojenkehitykseen. Negatiivisten tunteiden todettiin johtavan huomattavasti vahvempaan reaktioon kuin positiivisten

Stock Prediction Based on Social Media Data via Sentiment Analysis: a Study on Reddit

With the development of internet and information technology, online text data has become available and accessible for research in many fields including stock prediction. Social media, being one of the biggest content generators on the internet, is a great data resource for text mining and stock prediction. It has a large capacity, high data density, and fast information spread. In this thesis, analyses on the relationship between the stock-related text in social media (Reddit) and the price changes of corresponding stocks are implemented. In the analysis, sentiment analysis is first applied to extract the individual users’ emotions and opinions about the stocks. After that, the extracted features are analyzed via descriptive statistics and predictive analysis using the Pearson correlation coefficient and machine learning models. The predictive analysis is designed to examine the dependence between the social media text data and stock price change by evaluating the performance of predictions, four indicators are used in the evaluation including “prediction accuracy on price change direction” and three indicators in simulated algorithm trading experiments based on prediction results. They are “total profit with trading strategy for single stock”, “daily profit efficiency of trading strategy” and “total profit with Portfolio trading strategy”. From the results and the comparison with a Buy and Hold (B&H) baseline strategy, the predictions show good results in terms of “daily profit efficiency” and “total profit with Portfolio trading strategy”. Therefore, the online forum text from Reddit are proved to be correlated with future stock price changes and might be used to make more profit than B&H strategy by incorporating their information in portfolio trading strategies

Toward a Theory of Organizational Apology: Evidence from the United States and China.

Ph.D. Thesis. University of Hawaiʻi at Mānoa 2017

Three essays on the time series of returns

This dissertation consists of three essays on the time series of asset returns. The first essay in Chapter 1--Time-Varying Drivers of Stock Prices--provides novel evidence of the time-varying roles of subjective expectations in explaining stock price variations across the market and 30 industry portfolios monthly from 1976 to 2020. Cash flow expectations matter more under financial uncertainty and recessions, especially among the hardest-hit industries such as Telecommunications during the Dot-com Bubble, Financials during the Great Recession, and Healthcare during the Covid-19 pandemic. Conversely, discount rates explain more price variations during expansionary periods. Finally, inflation expectations, while accounting for 60 percent of price fluctuations in the high inflationary environment before 2000, play a negligible role thereafter. In the second essay in Chapter 2--Investor Sentiment and Asset Returns: Actions Speak Louder than Words--I analyze daily predictability of investor sentiment across four major asset classes and compares sentiment measures based on news and social media with those based on trade information. For the majority of assets, trade-based sentiment measures outperform their text-based equivalents for both in-sample and out-of-sample predictions. This outperformance is particularly noticeable in long-term forecasts. However, real-time mean-variance investors can only achieve economic gains using Bitcoin trade sentiment, suggesting the challenge of transforming sentiment into daily profitable trading strategies. In the last essay in Chapter 3--War Discourse and Disaster Premia: 160 Years of Evidence from Stock and Bond Markets--using a semi-supervised topic model on 7,000,000 New York Times articles spanning 160 years, I test whether topics of media discourse predict future stock and bond market returns to test rational and behavioral hypotheses about market valuation of disaster risk. Focusing on media discourse addresses the challenge of sample size even when major disasters are rare. Our methodology avoids look-ahead bias and addresses semantic shifts. War discourse positively predicts market returns, with an out-of-sample R2 of 1.35 percent, and negatively predicts returns on short-term government and investment-grade corporate bonds. The predictive power of war discourse increases in more recent time periods.Includes bibliographical references

Organizational Change in Action: A Qualitative Case Study of USAir\u27s Acquisition of Pacific Southwest Airlines

Five dominant theories of organizational change have emerged from the literature. Each of these models expressly expand on a singular and specific paradigm of how change can be viewed within organizations. The models of change are the micro-personal-therapeutic, meso-rational-managerial, meso-systems-organic, macro-cultural-symbolic and macro-political-economic. While the contemporary literature on organizational change has done much to further our understanding about the future of organizational change, very few works provide us with case study examples of organizational change in action. Missing is an understanding of what facilitators of change actually do in the process of change. The present study sought to provide a descriptive analysis of how one organizational change took shape in one major American corporation. Throughout an in-depth description of the acquisition of Pacific Southwest Airlines by USAir, five deliberate and planned actions resulted which were part of a strategic change plan designed to facilitate a smooth transition from one organization (PSA) to another (USAir) These actions were the internal mechanisms used for articulating the change, the external mechanisms used for articulating the change, the programmatic processes used during the change, the impacting leader actions and the grass roots movement. The actions were thoroughly described and analyzed in relation to the dominant change models. Trends from these actions revealed that specific paradigms emerged. The author concludes that a more multi-dimensional, rather than a singular, paradigm of change permeated the acquisition period. Although all models were represented, the political-economic and the systems-organic models dominated