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

2020 ◽  
Vol 30 (2) ◽  
pp. 24-35
Author(s):  
Georgiana Vrînceanu ◽  
Alexandra Horobeț ◽  
Consuela Popescu ◽  
Lucian Belaşcu
Keyword(s):  
Renewable Energy ◽  
Stock Returns ◽  
Stock Prices ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Causality Test ◽  
Volatility Clustering ◽  
Oil Price Volatility ◽  
Oil Markets

AbstractThis 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.

scholarly journals Determining If Oil Prices Significantly Affect Renewable Energy Investment in African Countries with Energy Security Concerns

Energies ◽  
2020 ◽  
Vol 13 (24) ◽  
pp. 6740
Author(s):  
Ishaya Tambari ◽  
Pierre Failler
Keyword(s):  
Renewable Energy ◽  
Interest Rates ◽  
Energy Security ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Energy Investment ◽  
Oil Price Volatility ◽  
Security Concerns ◽  
Renewable Energy Investment

As concerns regarding the adverse impacts of energy production and consumption on the environment grow, countries across the world are now charged with developing effective strategies that provide energy security and protect the environment. This means that efforts to generate significant investments and business opportunities to boost the growth of renewable energy need to increase rapidly. However, there are limited studies on what will facilitate the increase of renewable energy investment in Africa. The main factor considered in this study relates to the sensitivity to changes in oil prices, gross domestic product (GDP), interest rate and oil price volatility’s impact on the renewable energy investment (REI) in countries with energy security concerns and if there is any significant influence from oil price shocks. With the help of an unrestricted vector retrogressive model and an annual panel data approach that covers the period 1990–2018, this paper examines the link between renewable energy investment and three macroeconomic variables: oil prices, GDP growth-adjusted interest rates and oil price volatility. The results indicate that REI exhibited immediate positive responses to oil shocks. However, renewable energy investment continued to fluctuate negatively in response to GDP. The results also show that the REI responded positively to interest rates in Africa and it exhibited immediate negative responses to oil price volatility but became positive after the second period.

scholarly journals Economic Diversification and the State of Oil Dependency of UAE Stock Returns-An Analysis of ADX Indices 2014-2019

2019 ◽  
Vol 8 (4) ◽  
pp. 199
Author(s):  
T.P. Ghosh
Keyword(s):  
Stock Returns ◽  
Stock Return ◽  
Model Misspecification ◽  
Price Volatility ◽  
Commodity Price ◽  
Oil Price ◽  
Abu Dhabi ◽  
Causality Test ◽  
Oil Price Volatility ◽  
General Index

Impact of commodity price risk on stock return remains an important forecasting parameters across stock markets of developed and emerging markets. In recent times the subdued oil price poses a challenge to the economic imbalance among oil producing countries, and thus non-oil diversification has been adopted as an economic solution. Amongst the GCC countries, the intensity of non-oil diversification has been found to be  higher in the UAE which prompted to conduct a separate study of impact of oil price volatility on stock returns of Abu Dhabi Securities Market General Index and various sectoral indices. This study examines whether UAE stock returns are still associated with changes in oil price as reported in earlier research despite significant improvements in non-oil sector GDP contributions. The empirical assessment is based on weekly returns of the Abu Dhabi Stock Market General Index and four sectoral indices, namely, banking, industrial, energy and real estate in relation to variations in weekly WTI prices for the period between 1st week of 2012 to 29th week of 2019, i.e., for a period of  392 weeks applying Vector Error Correction model and Granger Causality test. It is found that there exists both long run and short run association between oil price volatility and stock return except model misspecification in respect of industrial and energy sectors arising out of serial correlation. Two lagged weekly oil price movements are found to be strong explanatory variables of stock returns. 

scholarly journals The Impact of International Oil Prices on the Stock Price Fluctuations of China’s Renewable Energy Enterprises

Energies ◽  
2019 ◽  
Vol 12 (24) ◽  
pp. 4630 ◽  
Author(s):  
Cody Yu-Ling Hsiao ◽  
Weishun Lin ◽  
Xinyang Wei ◽  
Gaoyun Yan ◽  
Siqi Li ◽  
...  
Keyword(s):  
Renewable Energy ◽  
Stock Prices ◽  
Stock Price ◽  
Capital Investment ◽  
Spillover Effect ◽  
Oil Prices ◽  
Listed Companies ◽  
Oil Price ◽  
Price Fluctuations ◽  
The Impact

In order to address a series of issues, including energy security, global warming, and environmental protection, China has ranked first in global renewable investment for the seventh consecutive year. However, developing a renewable energy industry requires a significant capital investment. Also, the international oil price fluctuations have an important impact on the stock prices of renewable energy firms. Thus, in order to provide implications for market investment as well as policy recommendations, this paper studied the spillover effect of international oil prices on the stock prices of China’s renewable energy listed companies. We used a Vector Autoregressive (VAR) model with innovations using a Factor-GARCH (Generalized Autoregressive Conditional Heteroskedasticity) process to evaluate the impact of market co-movements and time-varying volatility and correlation between the international oil price and China’s renewable energy market. The results show that the international oil price has a significant price spillover effect on the stock prices of China’s renewable energy listed companies. Moreover, the fluctuations of international oil prices have an influence on the stock price variations of Chinese renewable energy listed companies.

scholarly journals Oil price volatility and stock returns in the G7 economies

2016 ◽  
Vol 54 ◽  
pp. 417-430 ◽  
Author(s):  
Elena Maria Diaz ◽  
Juan Carlos Molero ◽  
Fernando Perez de Gracia
Keyword(s):  
Stock Returns ◽  
Price Volatility ◽  
Oil Price ◽  
Oil Price Volatility

VOLATILITY IN OIL PRICES AND MANUFACTURING ACTIVITY: AN INVESTIGATION OF REAL OPTIONS

2011 ◽  
Vol 15 (S3) ◽  
pp. 379-395 ◽  
Author(s):  
John Elder ◽  
Apostolos Serletis
Keyword(s):  
Real Options ◽  
Commodity Prices ◽  
Price Volatility ◽  
Oil Prices ◽  
Capital Budgeting ◽  
Oil Price ◽  
Real Options Theory ◽  
Oil Price Volatility ◽  
Manufacturing Activity ◽  
General Specification

Previous research shows that volatility in oil prices has tended to depress output, as measured by nonresidential investment and GDP. This is interpreted as evidence in support of the theory of real options in capital budgeting decisions, which predicts that uncertainty about, for example, commodity prices will cause firms to delay production and investment. We continue that investigation by analyzing the effect of oil price uncertainty on monthly measures of U.S. firm production related to industries in mining, manufacturing, and utilities. We use a more general specification, an updated sample that includes the increased oil price volatility since 2008, and we control for other nonlinear measures of oil prices. We find additional empirical evidence in support of the predictions of real options theory, and our results indicate that the extreme volatility in oil prices observed in 2008 and 2009 contributed to the severity of the decline in manufacturing activity.

scholarly journals How does gold and oil price volatility affect Turkish financial markets?

2020 ◽  
Vol 9 (4) ◽  
pp. 262-270
Author(s):  
Hakan Öner ◽  
Hande Kılıç Satıcı
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Interest Rates ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Volatility ◽  
Causality Relationship ◽  
Us Dollar ◽  
Turkish Lira

Gold and oil price volatilities are thought to have an impact on financial markets. The main aim of this study is to examine the effects of changes in gold and oil prices on Turkish financial markets. For this purpose, the effects of gold and oil price volatilities on nominal US dollar/Turkish lira exchange rate, Borsa Istanbul 100 Index and Turkey 10-year bond interest rates are used to represent Turkish financial markets are analysed by Granger Casuality Test. The study comprises daily data over the period of June 1, 2010 - April 30, 2017. According to the results of the analysis, there is no causality relationship from gold and oil prices to Turkish financial markets. On the other hand, it is concluded that there is a one-way causality relationship from BIST100 index to Turkey 10-year bond interest rate and two-way causality relationship between BIST 100 index and nominal US dollar/Turkish lira exchange rate.

OIL PRICE FLUCTUATIONS AND STOCK MARKET BEHAVIOR IN A RESOURCE-DOMINANT ECONOMY: CASE OF KAZAKHSTAN

2020 ◽  
pp. 1-25
Author(s):  
MOLDIR MUKAN ◽  
YESSENGALI OSKENBAYEV ◽  
NIKI NADERI ◽  
YERGALI DOSMAGAMBET
Keyword(s):  
Stock Market ◽  
Aggregate Demand ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Stock Index ◽  
Stock Market Index ◽  
Oil Price Volatility ◽  
Positive Shock ◽  
The Impact

During the past 10 years, the oil market has been very unpredictable and volatile, which created uneasy conditions for market participants. The remedy of increasing oil prices is considered as a positive factor for the economy of the Republic of Kazakhstan as an oil-exporting country. Using structural decomposition of vector autoregression (VAR), this study aims to examine how the whole financial system in Kazakhstan is depending on oil prices. The results suggest that the strongest factor affecting the stock index is aggregate demand, and the impact of oil production shocks on the equity market is, on average, insignificant. Such shocks can be discounted while a fall in oil prices affects financial conditions as a whole, damaging the solvency of Kazakhstan, an oil-exporting country. With the positive shock of aggregate demand, the stock market index tends to rise. There is also an effect of oil price volatility on changes in currency value, which also influences the financial situation of the country. Moreover, oil-exporting countries such as Kazakhstan can secure and support their economies with the help of “stable aggregate demand”. The focus on Kazakhstan as one of the oil-producing countries is interesting for at least two reasons. Importantly, oil-exporting countries supply oil to really strong countries concentrating on manufacturing and other industries. Besides, this study provides useful insights for countries with similar economic conditions, including similar stock market development.

scholarly journals Black Gold Has Fallen - No More Gambling on the Prices

2017 ◽  
Vol 2 (1) ◽  
pp. 25-31
Author(s):  
Yanuar Andrianto ◽  
Teuku Fahri Rais Oebit
Keyword(s):  
World Economy ◽  
Moving Average ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Percentage Error ◽  
Autoregressive Integrated Moving Average ◽  
Price Data ◽  
Oil Price Volatility ◽  
West Texas

Objective - The crude oil, also known as black gold, is an essential commodity for the sustainability of various industries in the world. Oil prices play an important role in world economy because it causes repercussions. For example, world oil prices plummeted at the end of 2013 and its impact created fluctuations in prices which had affected world economy badly. The aim of this research is to locate a good model that can help to predict oil price fluctuations so that industries can avoid potential negative impacts. Methodology/Technique - Data of world oil prices from 1987 to 2016 were extracted from West Texas Intermediate (WTI) and Brent Oil sources. A comparative analysis using Empirical Decomposition and Autoregressive Integrated Moving Average (ARIMA) was applied toidentify differences and data were then analysed through SPSS 23. For this research, a set of models based on the smallest MAPE (Mean Absolute Percentage Error) was proposed. Findings - Results indicate that the Empirical Decomposition was a more appropriate method for predicting oil prices due to the non-linearity of oil price data. In addition, the MAPE also produced a lower error rate than the ARIMA. Novelty - In this research, world oil price volatility fromWest Texas Intermediate (WTI) and Brent Oil Price data were examined to predict oil price movement for future anticipations. Type of Paper: Empirical Keywords: Forecasting, Oil Prices, Autoregressive Integrated Moving Average, ARIMA, Empirical Decomposition, West Texas Intermediate, Brent Oil Price.

scholarly journals An empirical analysis of volatility in South African oil prices

2021 ◽  
Vol 32 (3) ◽  
pp. 67-75
Author(s):  
Victor Mbua Mofema ◽  
Gisele Mah
Keyword(s):  
Interest Rates ◽  
South African ◽  
Money Supply ◽  
Price Volatility ◽  
Oil Prices ◽  
Oil Price ◽  
Series Data ◽  
Price Changes ◽  
Oil Price Volatility ◽  
Per Capita

Volatility of the oil price has been around since the 1970s and an understanding of how it evolves provides insight into solving macroeconomic challenges. The main objective of this study was to analyse the volatility of South African oil prices using quarterly time series data from 2000 to 2020. The effect of growth in gross domestic product per capita, interest rate, inflation and money supply growth on oil price changes was assessed. Generalised autoregressive conditional heteroscedasticity (GARCH) was estimated and diagnostic tests – namely ARCH, normality and autocorrelation tests – were conducted. The GARCH (1,2) model was the best fit, based on the Alkaike information criterion. The result revealed that interest rates and money supply growth have a significant positive effect on oil price changes in South Africa, while growth in GDP per capita and inflation has an insignificant impact. Past one and two-quarters’ oil price volatility increases and decreases the current oil price volatility respectively. Based on the findings, a contractionary monetary policy is recommended in order to reduce the volatility of South African oil prices.

scholarly journals EFECTOS DE LA INCERTIDUMBRE DE LOS PRECIOS DEL PETRÓLEO EN EL CRECIMIENTO ECONÓMICO DE MÉXICO

2019 ◽  
Vol 78 (309) ◽  
pp. 80 ◽  
Author(s):  
Domingo Rodríguez Benavides ◽  
Francisco López Herrera
Keyword(s):  
Economic Growth ◽  
Economic Activity ◽  
Price Volatility ◽  
Oil Prices ◽  
Negative Influence ◽  
Output Growth ◽  
Oil Price ◽  
Market Uncertainty ◽  
Oil Price Volatility ◽  
The Impact

<p>En este trabajo investigamos si la incertidumbre del precio internacional del petróleo incidió en la actividad económica de México durante 1983:2-2017:4. Empleamos un modelo de vectores autorregresivos (VAR) estructural bivariado con un proceso generalizado autorregresivo de heterocedasticidad condicional (GARCH) en media que captura el impacto de la volatilidad del petróleo en el crecimiento económico y la formación bruta de capital fijo. Nuestros resultados muestran que la incertidumbre del mercado petrolero tiene una influencia negativa en la actividad económica. Además, revelan la presencia de efectos asimétricos: la tasa de crecimiento de la producción aumenta (disminuye) después de un choque negativo (positivo) en el precio del petróleo. Estos resultados destacan la importancia de políticas públicas que mitiguen el efecto de la incertidumbre del mercado petrolero y contribuyan a la estabilidad económica.</p><p align="center"> </p><p align="center">EFFECTS OF OIL PRICES UNCERTAINTY ON MEXICO’S ECONOMIC GROWTH</p><p align="center"><strong>ABSTRACT</strong></p><p>We inquire whether the uncertainty of international oil prices affected Mexico’s economic activity during 1983:2-2017:4. To measure such impact we use a bivariate structural vector autoregressive (VAR) model with a generalized autoregressive conditional heteroskedasticity (GARCH) in-mean process that captures the impact of oil price volatility on economic growth and gross fixed capital formation. Our results show that the said uncertainty has a negative influence on Mexico’s economic activity. Further, they reveal the presence of asymmetric effects, as the output growth rate increases (decreases) after a negative (positive) oil price shock. These results highlight the importance of adopting public policies aimed at mitigating the effects of oil market uncertainty and help stabilize economic activity.</p>

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