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Stock immunity during the COVID-19 pandemic: financial performance, maximum drawdown, and recovery

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  • Lela Hindasah
  • Irwan Trinugroho
  • Atmaji
  • Doddy Setiawan

Abstract

This study investigates the effect of financial performance on stock immunity during the COVID-19 pandemic, focusing on maximum drawdown (MAX) and stock recovery in the context of Indonesia. The results reveal that firms with stronger financial performance demonstrate higher immunity, as indicated by lower MAXs and faster recovery. However, this relationship is not consistent across beneficial and detrimental sectors. Further analysis indicates that firms experiencing lower operating cash flow, larger market capitalisation, higher trading volumes, and increased volatility face greater challenges with more substantial MAXs. Conversely, firms with more independent commissioners and foreign ownership exhibit greater immunity to the impacts of the COVID-19 pandemic. During stock rebounds, better financial performance, lower MAXs, lower valuations, and higher trading volumes contribute to a faster recovery.

Suggested Citation

  • Lela Hindasah & Irwan Trinugroho & Atmaji & Doddy Setiawan, 2025. "Stock immunity during the COVID-19 pandemic: financial performance, maximum drawdown, and recovery," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 18(6), pages 395-427.
    • Handle: RePEc:ids:ijmefi:v:18:y:2025:i:6:p:395-427
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