Effects of COVID-19 Vaccine Developments and Rollout on the Capital Market -- A Case Study

TL;DR

This study investigates how COVID-19 vaccine development and rollout influence pharmaceutical companies' stock prices and market valuation, revealing correlations with public interest trends and company size effects.

Contribution

It provides an initial analysis of the relationship between public interest, vaccine development stages, and stock performance of COVID-19 vaccine companies.

Findings

Significant correlation between Google Trends and stock prices during development.

Post-rollout periods show a shift to negative correlation.

Smaller companies exhibit higher stock volatility.

Abstract

Various companies have developed vaccines to combat the pandemic caused 2020 by the virus COVID-19. Such vaccines and the distribution can have a major impact on the success of pharmaceutical companies, which in turn can show itself in their valuation and stock price. This poses the question if and how the trends or popularity of the companies might be connected to the value and stock price of said entities. To gain some insight into these questions, the work at hand looks at five COVID vaccine development companies and evaluates their correlations over the development of the vaccine as well as after the rollout start. The process was conducted by using python including various libraries. The result of this analysis was that there is a significant correlation between the Google Trend data and the respective stock prices (retrieved from yahoo! Finance) of the companies on average, where the time during the development of the drugs is more positively correlated and the post-rollout periods show a shift to a slightly negative inclining correlation. Furthermore, it was found that the smaller companies based on their market cap show a higher price volatility overall. In addition, higher average trend scores and thus popularity values were found after the rollout of the respective companies. In conclusion, a correlations between the trend data and the financial values have been found and corroborate the plots of the data. Due to the small size of the sample, the result cannot yet be considered statistically significant, but possibility for expansion exists and is already being worked on.