Study on Value Portfolio from the Perspective of COVID-19: A Case Study of Aviation, E-commerce and Retail Industry

Abstract

Diversified portfolio is a classic investment strategy which was put forward in the 1950s. However, due to the outbreak of COVID-19 in 2019, the traditional portfolio theory cannot be completely directly applied to the investment. Based on the literature review, this paper sorts out the modern portfolio theory and analyzes three industries of Airline industry, retail industry, and e-commerce industry and the typical companies in these three industries: Delta Airline, Walmart and Amazon. On the one hand, the impact of COVID-19 on the development trend of various industries is analyzed through qualitative methods. The research results show that as the passenger volume of the aviation industry decreasing sharply in 2020 and 2021, it will suffer huge economic losses. For the traditional retail industry, as more people choose e-commerce as well, it will also suffer no small blow; E-commerce, meanwhile, is more likely to survive the recovery. Walmart shares were hit hard by the outbreak, Amazon shares rose sharply because of demand for online shopping, and Delta Airlines shares fell because the city shut down. On the other hand, a quantitative analysis method is applied to generate the correlation matrix of the three companies. A conclusion is drawn that consumer should increase the weight of Walmart in the three stocks, reduce the proportion of Amazon, and reduce the purchase of Amazon Delta Airline. The conclusions of this paper provide practical support and reference for investors' investment.