Precious metals as safe-haven for clean energy stock investment: Evidence from nonparametric Granger causality in distribution test

Erdoğan, Seyfettin; Gedikli, Ayfer; Çevik, Emrah İsmail; ERDOĞAN>, Fatma; Çevik, Emre

doi:10.1016/j.resourpol.2022.102945

Cited by 29 publications

(5 citation statements)

References 27 publications

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“…They conclude that gold, silver and oil volatilities can hedge against clean energy stock prices. In contrast, Erdoğan et al (2022) analyze the causal relationship between precious metals and clean energy stocks and conclude that precious metals cannot be used to hedge the downside risk of clean energy stock investments.…”

Section: Literature Reviewmentioning

confidence: 99%

COVID-19 and the quantile connectedness between energy and metal markets

et al. 2023

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Section: Literature Reviewmentioning

confidence: 99%

COVID-19 and the quantile connectedness between energy and metal markets

et al. 2023

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“…Although none of the energy metals under study acts as a hedge for clean energy stock markets, the results support previous evidence on the hedging properties of precious metals, showing that Gold and Silver serve as hedges for certain clean energy stock indices. Complementary Erdoğan et al (2022) show that there is a unidirectional causal link from clean energy stock returns to precious metal prices in the centre and left tail of the distribution. On the other hand, there is strong feedback between the variables in the right tail of the distribution.…”

Section: Related Studies About Hedging Assetsmentioning

confidence: 92%

“…Jin et al (2019) examined three commonly used hedging assets: Bitcoin, Gold and crude oil. The results indicate that the dynamic correlations between the gold and crude oil markets In 2022, the authors Gustafsson et al (2022) and Erdoğan et al (2022) studied the relationship between clean energy stock indices and energy metals that are sensitive to the growth in demand for clean energy solutions and make inferences about whether energy metals can act as hedges or safe havens for clean energy stock indices. Gustafsson et al (2022) show statistically significant non-linear relationships between the markets studied.…”

Section: Related Studies About Hedging Assetsmentioning

confidence: 99%

Evidence on Price Formation In Financial Markets: A Multitemporal Analysis

Oliveira,

Dias,

Galvão

et al. 2024

RGSA

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Background: Although clean energy stocks have become a popular new asset class for market players, relatively little research has been done on risk management strategies for investors in clean energy stock markets. Gold and Silver are examples of precious metals typically considered suitable investments to hedge against uncertainty. Therefore, their demand tends to rise when stock markets decline. Purpose: The study aims to analyse the influence of precious metals (Gold, Silver and Platinum) and green stock indices (Clean Energy Fuels, Nasdaq Clean Edge Green Energy, S&P Global Clean Energy, WilderHill Clean Energy) on price formation during different economic periods between 1 January 2018 and 23 November 2023. Methods: The periods analysed were Tranquil, 2020 pandemic, pre-conflict and Conflict (Russian invasion of Ukraine). To this end, a VAR Granger Causality/Block Exogeneity Wald model was estimated to identify different influence patterns during each period. Results: During the Tranquil period, 15 movements affecting prices were observed, with Silver significantly influencing all its peers, while Gold impacted Platinum, S&P Global, Nasdaq and WilderHill. Platinum was the asset that received the most shocks from its peers. During the 2020 pandemic, there was an increase to 26 movements, with the S&P Global and Nasdaq Clean indices influencing most of their peers. Gold and Platinum continued to be the assets most influenced by their peers. In the pre-conflict period, 11 movements were identified, with the highlight being the mutual influence between Gold, the Nasdaq and WilderHill indices, and Platinum. During this period, Silver and S&P Global only affected the price formation of Platinum and Clean Energy Fuels, respectively. During the Conflict period, 18 movements were observed, highlighting the influence of Platinum and S&P Global on the price formation of various assets. Gold was the asset that received the most shocks from its peers during this period. Conclusion: the results indicate changes in the interactions between assets throughout the different economic contexts, highlighting the importance of understanding these dynamics to make more informed decisions.

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“…Additionally, clean energy stock indices measure the financial performance of companies operating in this constantly evolving sector. By studying the efficiency of these indices, 6 investors can assess not only the financial return potential but also the environmental and social impact of the companies included in these stock indices (Maghyereh and Abdoh, 2021;Erdoğan et al, 2022;Ren and Lucey, 2022). namely spot and over-the-counter (OTC) forward markets.…”

Section: Related Studiesmentioning

confidence: 99%

Extreme Events Cause Market Efficiency or Inefficiency? Evidence from Precious Metals and Green Stock Indices

Oliveira,

Dias,

Galvão

et al. 2024

RGSA

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Background: Green investments offer a promising market-based approach to tackling global climate change but are susceptible to risk transmission from multiple assets. Purpose: To examine the multifractality between precious metals (Gold, Silver, Platinum) and green stock indices, such as Clean Energy Fuels, Nasdaq Clean Edge Green Energy, S&P Global Clean Energy and WilderHill Clean Energy, over the period from 1 January 2018 to 23 November 2023. The study aims to answer the following question: Did the events of 2020 and 2022 cause efficiency or inefficiency in the markets analysed? Methods: The Detrended Fluctuation Analysis (DFA) econophysics model will be used to answer the research question. Results: During the period of stability, there was a clear division between the markets, with Gold and green energy indices demonstrating market efficiency, while Platinum, Silver and some green indices exhibited price persistence, suggesting opportunities for above-average gains. However, the 2020 global pandemic led to widespread inefficiencies in all the markets analysed, with precious metals and green energy indices showing price persistence, indicating patterns that could lead to arbitrage opportunities. The persistence in returns suggested a tendency for asset prices to continue in the same direction for an extended period, offering opportunities to identify ongoing market trends for investment. In the pre-conflict period, the random walk hypothesis was rejected in all markets, with precious metals exhibiting anti-persistence in returns, while green energy indices showed significant persistence. During the conflict period, precious metals and green energy indices converged towards persistence in returns, except Platinum, which showed anti-persistence. Conclusion: This study provides valuable insights for investors and financial market professionals, highlighting the importance of understanding asset price behaviour patterns in different economic contexts.

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Precious metals as safe-haven for clean energy stock investment: Evidence from nonparametric Granger causality in distribution test

Cited by 29 publications

References 27 publications

COVID-19 and the quantile connectedness between energy and metal markets

COVID-19 and the quantile connectedness between energy and metal markets

Evidence on Price Formation In Financial Markets: A Multitemporal Analysis

Extreme Events Cause Market Efficiency or Inefficiency? Evidence from Precious Metals and Green Stock Indices

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