Investment Strategies Regions Rotation: Using AI in COVID19 Times

This Covid19 investment strategies article was written by Isaac Rothstein – Analyst at I Know First.


  • The spread of Coronavirus has negatively impacted almost every stock market
  • Many countries have a correlation between active cases and their stock market performance
  • The United States’ technology companies is driving the S&P 500’s performance
  • Using AI can identify investment strategies to increase profits during COVID19

The spread of the Coronavirus began in January 2019 in Wuhan, China. The virus spread rapidly across the world but hit some countries harder than others and have affected each country’s stock market differently. We are going to explore how the coronavirus affected the stock market of different regions around the world and how to tailor your international investment strategies to maximize profits.


The Coronavirus began in China in the end of January and began to spread rapidly in the beginning and middle of February. On February 13th there were three times the amount of active cases than there were just two weeks prior.

Source: Worldometer

From January 21st to February 2nd, the SSEC (Shanghai Stock Exchange) Index decreased by 9.61%. This came while the virus began to spread throughout the country and made people realize that this virus can turn into something bigger than a common illness.

There was another major dip in the SSEC in the beginning and middle of March. Between March 4th and March 22nd,, the SSEC decreased by 12.38%. This wasn’t caused by a rise of cases in China, but because of the worldwide spread that occurred. During this time the virus began to be a widespread issue amongst almost every continent and major country around the world.

Since this second dip in the SSEC, it has been able to rebound rather quickly due to there not being another rise in cases. The SSEC is currently at $3367.97, almost 300 points higher than what it was when the Coronavirus began in January.


The Coronavirus started to spread in Japan in early and mid-March but didn’t reach its first peak of cases until the end of April. Since then there was a major decline in active cases until the beginning of July when the virus started to spread rapidly once again.

Source: Worldometer

Although the virus did not start to be widespread in Japan until March, the Nikkei 225 – a Japanese Stock Index – started to decline in the middle of February. Between February 11th and March 18th, the Nikkei 225 declined by 28.41%. This is a much more significant decline than the Chinese market.

From March until June there was almost a full recovery in the market, as active cases were decreasing, but in the beginning of July there was a second spike of cases. The curve on the second spike still seems to be on the rise which would indicate that the Nikkei 225 may decline further. Since July 14th, the Nikkei 225 has declined by 4.86%. This dip is not nearly as extreme as the first one, but cases may still be on the rise and cause the index to fall even further.


Brazil didn’t see its first spike in Coronavirus cases until the beginning of May, but its stock market took a hit months prior to the virus reaching the country. Although it was plagued by the virus months later than other countries, there has still been no decline in active cases since its arrival.

Source: Worldometer

Brazil’s BVSP index declined 44.71% from February 19th to March 23rd and has struggled to recover since. Although Brazil’s peak of cases is much later than most countries, they have been hit extremely hard nearing 800,000 active cases to date. They are one of a few countries that have seen no decline and their stock market reflects that. While other countries are seeing significant recovery since the beginning of the pandemic, Brazil’s BVSP index is still down over 10% since the middle of February.

With no sign of the pandemic slowing down in Brazil their markets may be one of the slower countries to recover and could further decline if their cases continue to increase at the same rate it is now.


In the middle of March, France had a drastic increase of cases going from 10,000 to 60,000 in just over two weeks. Since then they have not seen a major decline in active cases and have recently been on the rise again.

Source: Worldometer

The CAC 40 index declined 38.30% from February 19th to March 18th, when the coronavirus was just introduced to France. Since then the market has recovered relatively slowly and has even started to decline again at the end of July. France’s active Coronavirus cases seem to directly impact the CAC 40; when active cases increase drastically, the index declines.

A second wave of Coronavirus has hit France hard as their active cases continue to reach the country’s high. With no sign of a decline of cases, the CAC 40 may decline even further and take a while to recover to its $6,100 price point from the middle of February.

United States

Unlike any country we have previously analyzed, there seems to be almost no correlation to Coronavirus cases and the S&P 500. Other than the 33.81% decline that took place from the middle of February to the middle of March, the S&P 500 has been able to almost recover fully and reach all time highs. Although Coronavirus cases are still rising, the S&P 500 is rising as well.

Source: Worldometer

This makes it seem as if the American market isn’t affected by the Coronavirus, but this is not true. The reason why the S&P 500 is still rising is because it is comprised of over 25% technology stocks, including its six largest holdings. Since March 23rd the six technology stocks that “control” the S&P 500 are up 86.36% (AAPL), 54.36% (MSFT), 74.04% (AMZN), 68.62% (FB), 40.39% (GOOG), and 41.25% (GOOGL). Although these stocks have all performed extremely well since the end of March, the S&P 500 has increased by 42.80%. This seems like an extraordinary increase, but it is significantly lower than the performance of its 3 biggest holdings (AAPL, MSFT, AMZN) which reflects that the rest of the S&P 500 is drastically underperforming these few stocks.

Technology Companies Impact on the S&P 500

These technology stocks aren’t negatively affected by the Coronavirus because while people are working at home or shopping online, they have to use these companies’ products in order to maintain their regular lifestyle. Technology companies are able to still turn a profit during these times while companies in other industries, such as airlines, may be struggling to not go into bankruptcy.

The American market has reacted the same way that many other countries have during the Coronavirus. Removing the outlier tech companies, the S&P 500 is still struggling to recover after the Coronavirus. With no decline in cases nearby, there may be a second dip in the American market (although possibly not the S&P 500) to be wary of.

AI Investment Strategies During COVID19

An investment strategy that can be used during the Coronavirus is identifying regions that have a declining number of cases. Other than the American technology companies, when cases decline the stock market tends to recover. AI can help identify which markets are recovering and can be used as a part of your investment strategies to increase profits during COVID19.

Coronavirus Stock Market Forecast

From April 30th to July 30th our AI was able to identify markets and companies that would be positively affected by the Coronavirus. In those three months, our average profit was 98.08% while the S&P 500 increase by 11.27%. Our Coronavirus package can be used in your investment strategies to drastically increase profits during this pandemic.

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Please note-for trading decisions use the most recent forecast