Co-movement between dirty and clean energy: A time-frequency perspective

Saqib Farid, Sitara Karim, Muhammad A. Naeem, Rabindra Nepal, Tooraj Jamasb

Research output: Contribution to journalArticlepeer-review

62 Citations (Scopus)


In the backdrop of the recent covid-19 pandemic there is a renewed interest to understand the interlinkages between dirty and clean energies. In this regard, the study examines the co-movement structure between clean energy stocks and dirty energies before and during the covid-19 outbreak. The study analyses the interlinkages between the underlying markets by utilizing a vast sample of dirty energies namely crude oil, heating oil, gas oil, gasoline and natural gas, whereas clean energy sector is proxied by S&P Global clean energy index and Wilder Hill clean energy index. We make use of rolling window wavelet approach and wavelet coherence analysis to identify interdependencies between the clean energy stocks and dirty energies. The results exhibit weak linkages between clean energy equities and dirty energies in the short-run, while; we also record few occasions of high co-movements among dirty and clean energy markets in the long-run. Noticeably, a distinct decoupling effect persisted between dirty and clean energy markets. In addition, the findings also illustrate that clean energy market is relatively isolated from dirty energies during the recent pandemic crisis, amplifying portfolio diversification benefits across clean and dirty energy markets. The findings of the study hold meaningful insights for investors, policy makers and other market participants in energy financial markets.

Original languageEnglish
Article number106565
JournalEnergy Economics
Publication statusPublished - Mar 2023


  • Clean-energy stocks
  • Co-movement
  • Dirty energy markets
  • Wavelet coherence
  • Wavelet correlations

ASJC Scopus subject areas

  • Economics and Econometrics
  • General Energy


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