Scientists have found safe-haven assets in the energy market

Energy Economics: study shows that it is safe to invest in the green energy market

Scientists from the Ural Federal University (UrFU) believe that additional investments in green energy, known as hedging, are a reliable way to reduce risks with the main investments in oil energy. Their study, published in the journal Energy Economicsconfirmed that this distribution of investments contributes to the growth of profits from both types of energy carriers.

Hedging, or “fencing”, is a method of protecting against financial loss by spreading investments between two opposing products. One of them is the main one with a high potential income, and the other one is secondary and more stable in order to compensate for possible losses if the value of the main assets decreases.

In Russia, such hedging is often applied to assets in the energy market, as the energy industry is one of the most profitable in the country. However, investors previously did not have a clear understanding of the relationship between the markets for oil and green energy, that is, energy produced using renewable sources that do not harm the environment.

“According to our study of the assets of various companies for the period from 2014 to 2021, we found that the growth of the oil stock market contributes to a moderate increase in the price of green stocks and bonds. sources of energy,” said Kazi Sohag, Associate Professor of the Department of Economics of UrFU.