Research on the link between RMB Exchange Rate and Tesla’s Stock Price: A Long-term Perspective
Jinhao Yu*
International College, Xiamen University, Xiamen, 361005, China
*Corresponding Author: Jinhao Yu, International College, Xiamen University, Xiamen, 361005, China.
Published: September 11, 2024
Abstract
After China's exchange rate reform, the exchange rate has changed more frequently. The foreign exchange market has an increasing impact on the securities market. This paper analyzes the link between Tesla's stock price and exchange rate of the renminbi against US dollar by establishing VAR model and ARMA-GARCHX model. In the empirical analysis, this paper uses Tesla's daily stock price from June 29, 2010, to June 9, 2023 and the daily exchange rate in the same period as the research data. And the unit root test, impulse response analysis and ARMA GARCHX estimation are used to test the data. Through empirical analysis, this paper concludes that the exchange rate will indeed have an impact on Tesla's stock price, and this impact is mainly negative. Compared with other studies in the same field, the research object selected in this paper is more detailed and specific. This study helps to predict the change of Tesla's share price and preserve the stability of financial markets in the event of exchange rate changes, and investors, policy makers and Tesla itself can also adjust their strategies and plans according to this law. Policy makers can apply the conclusions of this paper to affect the stock market by manipulating exchange rate changes.
Keywords: Exchange rate; Stock Price; VAR Model; ARMA-GARCHX Model
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