Clean Energy Stock Indexes: Trends, Fluctuations, and Implications for Investors
Clean Energy Stock Indexes: Trends, Fluctuations, and Implications for Investors

Author(s): Mariana Chambino, Rui Dias, Cristina Morais da Palma
Subject(s): Social Sciences, Energy and Environmental Studies, Financial Markets
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Events for 2020 and 2022; Clean energy stock index; Persistence in returns; Portfolio diversification
Summary/Abstract: The heightened attention towards clean energy markets has been spurred by COVID-19 and geopolitical concerns in 2022. This study investigates the persistence of the Nasdaq Clean Edge Green Energy, WilderHill Clean Energy, S&P Global Clean Energy, iShares Global Clear Energy ETF, and Clean Energy Fuels stock indexes for the period from May 3, 2018, to May 2, 2023. The findings are mixed since long memories were observed throughout the tranquil period; therefore, the events of 2020 and 2022 did not accentuate persistence. Based on the findings, it can be inferred that the long-term predictability of clean energy markets has potential advantages for investors with a focus on environmentally sustainable investments. However, investors must be aware of market risks and volatility, especially during periods of economic or political instability. To reduce risk and increase returns, investors should diversify their portfolios across different clean energy indexes and other asset classes.

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