Do Sustainable Energy Stock Indices and Precious Metals Perform as Hedging Assets During Periods of Uncertainty in International Markets?

Abstract

This study contributes to the literature by examining the links between clean energy stocks and commodities such as gold, silver, and platinum. The purpose was to examine the clean energy stock indices, namely Clean Energy Fuels, Nasdaq Clean Edge Green Energy, S&P Global Clean Energy, WilderHill Clean Energy, and the precious metals Gold, Handy & Harman; Silver, Handy & Harman; and London Platinum over the period from January 1, 2021 to November 23, 2023. The results revealed significant changes in hedging asset characteristics related to the sustainable energy and precious metals indices. The movements that impact price formation increased from 11 to 18 in the conflict sub-period, indicating greater complexity and interdependence between the assets analyzed. These results have important implications in the context of enormous growth in investments in clean energy stocks and the repeated occurrence of periods of uncertainty.