Stock market performance as a function of company characteristics and Covid-19- evidence from Finnish listed companies’ performance in 2020

Abstract

I evaluate the connection between company stock market performance and varied company char-acteristics in Finland in relation to the Covid-19 pandemic using company characteristics and weekly stock returns data from Finnish companies listed on Nasdaq OMX Helsinki. I compare company returns to market returns and risk-adjusted returns, using interactions between compa-ny characteristics and the Covid-19 situation as the variables. I manage to find two company characteristics which affect stock market performance during the financial crisis caused by Covid-19. The pre-2020 liquidity of a company positively affects compa-ny performance on the stock market and pre-2020 leverage of a company negatively affects com-pany performance on the stock market. None of the characteristics affect market performance when they are not interacted with Covid-19, confirming that liquidity and leverage do affect com-pany stock performance specifically in relation to Covid-19.