Investigating the Causal Relationship Between Energy and Stock Markets with the Fourier Model
DOI:
https://doi.org/10.20491/isarder.2024.1941Keywords:
Clean Energy, TechnologyAbstract
Purpose – The relationship between energy, technology and stock markets is worth investigating for investors and policy makers in many aspects such as economic activity, investment strategies, sustainability and energy security. In this study, the causality relationship between clean energy, technology, stock and oil markets is investigated. Design/Methodology/Approach – WilderHill Clean Energy Index, ARCA Technology 100 Index, S&P 500 Index and WTI crude oil return series for the period 02.01.2004-19.07.2024 were used in the study, Toda-Yamamoto (1995) and Fourier Toda-Yamamoto (2016) causality analysis methods were used. Findings – According to the results of Toda-Yamamoto (1995) and Fourier Toda-Yamamoto (2016) causality tests, a bidirectional causality relationship between WilderHill Clean Energy Index and ARCA Technology 100 and S&P 500 Index, S&P 500 Index and WTI crude oil prices, and a unidirectional causality relationship from ARCA Technology 100 Index to WTI crude oil prices were found. Discussion – Developing strategies by taking these relationships into account when diversifying their portfolios may enable investors to be more successful in risk management and increase their return potential. In addition, such findings are also important for policy makers, as they may contribute to important decisions in determining energy strategies and ensuring the economic and financial stability of the country.
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