Innovative spillover strategies between global renewable energy and Islamic stock markets: safe hedging in shocks

Waheed Ullah Shah (), Ijaz Younis (), Mohammad Zoynul Abedin (), Xiyu Liu () and Layal Isskandarani ()
Additional contact information
Waheed Ullah Shah: Shandong Normal University
Ijaz Younis: Guangzhou University
Mohammad Zoynul Abedin: Swansea University
Xiyu Liu: Shandong Normal University
Layal Isskandarani: Teesside University

Economic Change and Restructuring, 2025, vol. 58, issue 4, No 1, 34 pages

Abstract: Abstract This study explores innovative spillover strategies between global renewable energy, Dow Jones, and Islamic stock indices during recent global crises. We applied the TVP-VAR approach and found that the total connectedness index for spillover effects between Islamic and global renewable energy stock indices was more than 50 percent across all subsamples. During the COVID-19 crisis, FTSE-Sharia and the MSCI Islamic world were significant risk spillover receivers. The Dow Jones Islamic developed market, Dow Jones Industrial, and renewable energy ICLN are significant spillover receivers during the Ukrainian war. Conversely, the renewable energy SMOG, NEX, and Dow Jones Islamic emerging markets are significant risk spillover transmitters in COVID-19. We suggest that investors choose renewable energy, such as SMOG and NEX, as important volatility transmitters to ensure portfolio diversification and protect themselves against crises. Furthermore, by advancing their allocations to indices such as the Global Dow Jones Islamic Market Index and MSCI Islamic World, which act as significant volatility spillover receivers during global shocks, Islamic investors can improve the stability of their portfolios. Our study provides an innovative and empirical analysis for investors and speculators to make informed decisions in these markets during times of shocks.

Keywords: Renewable energy; Dow Jones; Islamic stocks; COVID-19; Ukrainian war; TVP-VAR (search for similar items in EconPapers)
JEL-codes: G1 G10 Q40 Q42 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10644-025-09888-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ecopln:v:58:y:2025:i:4:d:10.1007_s10644-025-09888-x

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2

DOI: 10.1007/s10644-025-09888-x

Access Statistics for this article

Economic Change and Restructuring is currently edited by George Hondroyiannis

More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().