Graduation Year

2026

Date of Submission

12-2025

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Peter Kelly

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.

Abstract

This thesis examines whether hurricanes in the US influence the stock returns of Generac Holdings (NYSE: GNRC), a leading manufacturer of backup generators whose sales are often linked to demand spikes following extreme-weather events. Motivated by the rising frequency and severity of hurricanes due to climate change, this study tests whether these events generate predictable positive abnormal returns as investors price in future increases in demand. Using daily data from 2010 to 2024, I regress Generac’s returns on the Fama-French Five Factors and dummy variables for event windows. Hurricane data is drawn from the NOAA HURDAT2 North Atlantic Hurricane Database. I run four separate regressions with different dummy variables: landfall days, a ±6-day window around storms, major hurricanes (Category ≥3), and the hurricane season (June-November). The model measuring the impact on landfall day suggests that landfall is associated with positive average abnormal returns of ~0.72%. Furthermore, the model with a ±6-day window reveals evidence of positive abnormal returns in the lead-up to landfall. Since modern tracking systems can estimate the probability of landfall with high accuracy several days in advance, my results suggest a potentially successful trading strategy. The other models yield directionally positive but statistically insignificant event effects, limiting further trading opportunities.

Download

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

Share

COinS