Factors Influencing Investment Risk in Real Estate Companies’ Stocks

Abstract

Purpose: This study aims to empirically assess the determinants of investment risk in the real estate stock sector in Vietnam.
Design/methodology/approach: Employing the Feasible Generalized Least Squares estimation method, the research analyzes panel data from 85 real estate companies on the Vietnam stock exchange spanning the period 2018–2023.
Findings: The empirical results indicate that adverse events such as the Covid-19 pandemic, the Russia–Ukraine conflict…, along with market risk, the beta coefficient, and financial leverage exert a positive influence on the investment risk. Conversely, profitability, short-term capital management efficiency and firm size are found to have a mitigating effect on investment risk.
Originality/value: These findings offer critical implications for investors, enabling them to better identify, minimize, and hedge risks associated with real estate equity investments.