Oil Prices and Stock Prices of Alternative Energy Companies: Time Varying Relationship with Recent Evidence
AbstractThis paper examines the recent interactive relationships between the crude oil prices and stock performances of alternative energy companies. The examination was conducted from 2001 to mid-2010, and the sample period is divided into three sub-periods according to two Middle East wars. Different dynamics of oil prices across these sub-periods are significantly documented for the first time. In recent years, oil prices have become significantly responsible for the stock performances of alternative energy companies. This finding suggests that the stock market investors of the alternative energy sector have only recently incorporated oil price shocks into their trading decisions. The volatility spillover effect between oil prices and the stock index of the alternative energy sector has also been established in recent years. This latest evidence on the interaction between the two markets is shown for the first time in the literature and should be well used by market participants.
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Bibliographic InfoArticle provided by College of Business, Feng Chia University, Taiwan in its journal Journal of Economics and Management.
Volume (Year): 8 (2012)
Issue (Month): 2 (July)
crude oil price; alternative energy; oil stock index; VAR;
Find related papers by JEL classification:
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
- P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
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