Work

Interplay of Alternative Energy Sub-Sectors, Oil Prices, and Oil Volatility: Exploring Simultaneous Relationships

Year: 2025

Type: article

Abstract: This study examines the simultaneous relationships among oil prices, oil volatility, and two sub-sectors within alternative energy stocks: renewable energy equipment (REE) and alternative fuels (AF). The results confirm the existence of a bidirectional relationship. While most alternative energy stocks with a long history on the stock exchange exhibit a bidirectional positive correlation with oil prices, they demonstrate a bidirectional negative correlation with oil volatility. In particular, a majority of REEs, as opposed to a minority of AFs, demonstrate a bidirectional positive correlation with oil prices. Conversely, the majority of REEs, contrasted with a minority of AFs, exhibit a bidirectional negative correlation with oil volatility. Notably, newly listed alternative energy stocks show no significant relationship with either oil prices or oil volatility. This suggests that these emerging entities may be influenced by factors beyond traditional energy market dynamics, such as technological innovation, regulatory frameworks, or investor sentiment. Furthermore, the findings highlight that REEs tend to have a more substantial relationship with both oil prices and oil volatility compared to AFs. Recognizing the distinct sensitivities and market behaviours of these sub-sectors can enable more informed decision-making and resource allocation.

Source: International Journal of Financial Studies

DOI: 10.3390/ijfs13010023

Author: Minh Thi Hong Dinh

Institution: University of Inland Norway

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Affordable and clean energy

Open Access status: gold

Estimated APC paid: $2,172