Stock Markets, Oil, and Bitcoin during the Russian-Ukrainian War

Abstract

This research examines the effect of the public interest in the Russian-Ukrainian war on the returns of the stock market indices, as well as on the oil and Bitcoin price returns. The stock market indices considered for the research are AEX, S&P/BMV, NIKKEI225, S&P 500, FTSE100, S&P/ASX 200, CAC40, and JSE, while the public interest is proxied by the Google Trends data. Our first research question is whether crude oil is a good hedging instrument at the time of Russian-Ukrainian war. Secondly, we investigate if Bitcoin has any hedging capabilities during the war. Thirdly, we search for the stock market indices to hedge the risk during the war against Ukraine. The research is conducted using panel data and time series methodologies. Panel data analysis indicates the diminishing positive effect over the analysed periods of the war. Time series results show both positive and negative associations between Google Trends queries of a certain location and its corresponding asset/index, thereby no definite inference can be drawn on which of the separately analysed assets may serve as an uncompromised safe-haven asset during the Russian-Ukrainian war. As an additional contribution, this research paves the way for future analyses and improvements to approaches in the field.