Hedging against risks associated with travel and tourism stocks during COVID‐19 pandemic: The role of gold

Hedging against risks associated with travel and tourism stocks during COVID‐19 pandemic: The role of gold

The global lockdowns including movement restrictions during COVID‐19 pandemic impacted the hospitality business negatively and by extension the trading of related stocks such as travel & tourism stocks. Owing to the long standing hedging potential of gold, we examine whether this potential can b...

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Veröffentlicht in:International journal of finance and economics 2023-04, Vol.28 (2), p.1872-1882
Hauptverfasser: Sikiru, Abdulsalam Abidemi, Salisu, Afees A.
Format: Artikel
Sprache:eng
Schlagworte:
COVID-19
Economic impact
gold
hedging
Hospitality industry
Pandemics
travel & tourism stocks
volatility spillovers
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container_title International journal of finance and economics
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creator Sikiru, Abdulsalam Abidemi
Salisu, Afees A.
description The global lockdowns including movement restrictions during COVID‐19 pandemic impacted the hospitality business negatively and by extension the trading of related stocks such as travel & tourism stocks. Owing to the long standing hedging potential of gold, we examine whether this potential can be extended to the travel & tourism stocks in order to hedge against the associated risks caused by the current pandemic. Using daily data from January 2016 to July 2020 and constructing optimal portfolio strategies, we find that gold serves as a very strong hedge and safe haven for travel & tourism stocks, most especially in the pandemic period. This conclusion validates the inclusion of gold in the diversified portfolio of travel & tourism stocks in order to improve the risk‐adjusted return performance for investors in the sector particularly during COVID‐19 pandemic.
doi_str_mv 10.1002/ijfe.2513
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source Wiley Online Library Journals Frontfile Complete; Business Source Complete
subjects COVID-19
Economic impact
gold
hedging
Hospitality industry
Pandemics
travel & tourism stocks
volatility spillovers
title Hedging against risks associated with travel and tourism stocks during COVID‐19 pandemic: The role of gold
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