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Renewable Energy Stocks Increasingly Benefit from Oil Price Volatility

March 10, 2011

It is conventional wisdom among proponents of alternative energy projects and companies (among which this blog unapolagetically counts itself) that increases in conventional energy prices benefit alternative energy projects and company stock values.

In a paper being presented tomorrow (Friday 11 March) at the SouthWestern Finance Association conference in Houston by researchers at Yuan Ze University in Taiwan, this relationship is confirmed empirically.  In fact, there is an increasing trend in recent years.

The paper, “Oil Prices and Stock Prices of Alternative Energy Companies: Time Varying Relationship with Recent Evidence” reviews multi-year price and trading activity data of alternative energy stock prices in relation to oil price and trading activity.

The paper discovers evidence that in recent years the propensity for investors to factor in conventional energy prices in alternative energy stock trade activity has increased.


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