<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This study investigates the relationship between oil price fluctuations and renewable energy stock returns using daily data on Brent crude oil prices and global renewable energy stock market indices between 29 November 2010 and 18 February 2020. The investigation is based on the existing evidence on positive correlations between stock prices and oil prices, but it also considers the shift from non-renewable to renewable sources of energy. A two-stage GARCH(1,1) model and a Granger causality test were applied. Our results show that volatility clustering is present in the renewable energy companies‘ stock prices, but, oil price volatility does not seem to induce any significant effects on returns‘ volatility. This might suggest that oil markets and renewable energy markets are rather disconnected, which means that the development of renewable energy businesses is less affected by potential shocks in the oil prices and markets. As a result, the exposure of companies and entrepreneurs in the renewable sector to an important source of macroeconomic volatility is reduced.</p></abstract>

This study investigates the relationship between oil price fluctuations and renewable energy stock returns using daily data on Brent crude oil prices and global renewable energy stock market indices between 29 November 2010 and 18 February 2020. The investigation is based on the existing evidence on positive correlations between stock prices and oil prices, but it also considers the shift from non-renewable to renewable sources of energy. A two-stage GARCH(1,1) model and a Granger causality test were applied. Our results show that volatility clustering is present in the renewable energy companies‘ stock prices, but, oil price volatility does not seem to induce any significant effects on returns‘ volatility. This might suggest that oil markets and renewable energy markets are rather disconnected, which means that the development of renewable energy businesses is less affected by potential shocks in the oil prices and markets. As a result, the exposure of companies and entrepreneurs in the renewable sector to an important source of macroeconomic volatility is reduced.

The Influence of Oil Price on Renewable Energy Stock Prices: An Analysis for Entrepreneurs

The Bucharest University of Economic Studies

Studia Universitatis „Vasile Goldis” Arad – Economics Series

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This study investigates the relationship between oil price fluctuations and renewable energy stock returns using daily data on Brent crude oil prices and...

The Influence of Oil Price on Renewable Energy Stock Prices: An Analysis for Entrepreneurs

Online veröffentlicht: 15. Juni 2020

Seitenbereich: 24 - 35

Eingereicht: 01. März 2020

Akzeptiert: 01. Apr. 2020

DOI: https://doi.org/10.2478/sues-2020-0010

Schlüsselwörter
oil price, global renewable energy indices, GARCH, Granger Causality

© 2020 Georgiana Vrînceanu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Influence of Oil Price on Renewable Energy Stock Prices: An Analysis for Entrepreneurs

Online veröffentlicht: 15. Juni 2020

Seitenbereich: 24 - 35

Eingereicht: 01. März 2020

Akzeptiert: 01. Apr. 2020

DOI: https://doi.org/10.2478/sues-2020-0010

Schlüsselwörteroil price, global renewable energy indices, GARCH, Granger Causality

© 2020 Georgiana Vrînceanu et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Schlüsselwörter
oil price, global renewable energy indices, GARCH, Granger Causality