Pandemic crisis versus global financial crisis: Are Islamic stocks a safe-haven for G7 markets?

Muhammad Arif, Muhammad Abubakr Naeem, Mudassar Hasan, Suha M Alawi, Farhad Taghizadeh-Hesary

Research output: Contribution to journalArticlepeer-review

45 Citations (Scopus)


This study draws a comparison between the Global Financial Crisis (GFC) and the COVID-19 pandemic crisis to assess the safe-haven potential of Islamic stocks for G7 stock markets. We employ the cross-quantilogram framework of Han et al., which considers the non-linearity in the relationship, and thus captures the correlation between the Islamic and G7 stock markets across various quantiles reflecting different market conditions. The analysis also includes the time-varying cross-quantile correlation to observe the evolution of Islamic stocks' safe-haven potential. Our full sample analysis shows that Islamic stocks do not exhibit safe-haven properties for G7 stock markets. During the GFC period, Islamic stocks show some diversification benefits for the G7 stock markets. Notably, Islamic stocks emerged as a robust safe-haven asset for the G7 stock markets during the pandemic crisis. The study carries essential insights for equity investors and regulators of G7 and other countries to implement diversification/hedging strategies that would involve Islamic stocks to protect equity investments and the overall financial system amid the financial downturns.

Original languageEnglish
Pages (from-to)1707-1733
Number of pages27
JournalEconomic Research-Ekonomska Istrazivanja
Issue number1
Publication statusPublished - 2022
Externally publishedYes


  • COVID-19
  • extreme market conditions
  • G7 markets
  • Islamic stocks
  • safe-haven

ASJC Scopus subject areas

  • Economics and Econometrics


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