Interplay of Alternative Energy Sub-Sectors, Oil Prices, and Oil Volatility: Exploring Simultaneous Relationships

Minh Thi Hong Dinh ()
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Minh Thi Hong Dinh: Department of Business Administration, Inland School of Business and Social Sciences, University of Inland Norway, Postboks 400, 2418 Elverum, Norway

IJFS, 2025, vol. 13, issue 1, 1-30

Abstract: This study examines the simultaneous relationships among oil prices, oil volatility, and two sub-sectors within alternative energy stocks: renewable energy equipment (REE) and alternative fuels (AF). The results confirm the existence of a bidirectional relationship. While most alternative energy stocks with a long history on the stock exchange exhibit a bidirectional positive correlation with oil prices, they demonstrate a bidirectional negative correlation with oil volatility. In particular, a majority of REEs, as opposed to a minority of AFs, demonstrate a bidirectional positive correlation with oil prices. Conversely, the majority of REEs, contrasted with a minority of AFs, exhibit a bidirectional negative correlation with oil volatility. Notably, newly listed alternative energy stocks show no significant relationship with either oil prices or oil volatility. This suggests that these emerging entities may be influenced by factors beyond traditional energy market dynamics, such as technological innovation, regulatory frameworks, or investor sentiment. Furthermore, the findings highlight that REEs tend to have a more substantial relationship with both oil prices and oil volatility compared to AFs. Recognizing the distinct sensitivities and market behaviours of these sub-sectors can enable more informed decision-making and resource allocation.

Keywords: alternative energy stocks; renewable energy equipment stocks; alternative fuels stocks; oil prices; oil volatility; stock market (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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