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Gold, bitcoin, and portfolio diversification: Lessons from the Ukrainian war

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  • Oosterlinck, Kim
  • Reyns, Ariane
  • Szafarz, Ariane

Abstract

Evidence from the 2022 Ukraine war suggests that, for diversification purposes, gold and bitcoin are complements rather than substitutes during crises. Precisely, this paper shows that (i) gold is a diversifier for European stocks, oil and T-Bills, and a hedge for US stocks, while Bitcoin is a diversifier for all the assets, and (ii) since the outbreak of the war, gold is a safe haven for both stock markets, but its correlation with oil increases, while Bitcoin has the opposite pattern. Bitcoin diversifies the oil risk better than gold does. Meanwhile, the gold/bitcoin correlation drops during the war.

Suggested Citation

  • Oosterlinck, Kim & Reyns, Ariane & Szafarz, Ariane, 2023. "Gold, bitcoin, and portfolio diversification: Lessons from the Ukrainian war," Resources Policy, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:jrpoli:v:83:y:2023:i:c:s030142072300421x
    DOI: 10.1016/j.resourpol.2023.103710
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    Cited by:

    1. Charalampos Basdekis & Apostolos Christopoulos & Ioannis Katsampoxakis & Vasileios Nastas, 2022. "The Impact of the Ukrainian War on Stock and Energy Markets: A Wavelet Coherence Analysis," Energies, MDPI, vol. 15(21), pages 1-15, November.

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    More about this item

    Keywords

    Bitcoin; Gold; Diversification; Safe haven; Hedge; 2022 Ukraine war;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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