Assessing the Post-Pandemic Performance: Risk-Return Dynamics of China’s New Energy Sector Stocks

China’s new energy sector, vital for sustainable development and environmental protection, has experienced robust growth, especially following the COVID-19 outbreak in 2020. This industry, covering renewable energies such as wind, solar, thermal, hydroelectric power, and smart grids, has become integral to China’s energy independence and economic innovation. This paper explores China’s new energy sector through the lenses of stock market performance and government policies that have incentivized its advancement. Employing the Capital Asset Pricing Model (CAPM), we assess the risk-return profiles of prominent new energy stocks, illustrating their potential for higher returns despite increased volatility. The analysis confirms the sector’s positive investment outlook and the efficacy of the CAPM in evaluating financial prospects within this dynamic market.