Safe-haven assets for renewable energy stock investments

This paper compares the safe-haven abilities of VIX, gold, Bitcoin, and green bonds against the risk of sectoral renewable indices: Solar, Wind, Bio-Clean fuel, and Geothermal. Using R-vine Copula-CVaR approach and daily data from February 2, 2018 to February 20, 2023, covering the Covid-19 outbreak, the results show the following: Firstly, gold and green bonds are strong safe-havens for renewable energy investments, given their ability to reduce both downside and upside risks irrespective of the weight of the portfolio. Secondly, VIX and Bitcoin are weaker safe-havens given that they can achieve downside and upside risk reduction in small portfolio weights. Thirdly, the results hold before and during the Covid-19 pandemic sub-periods. The findings are useful for various participants, such as investors and portfolio managers concerned with the protection of their renewable energy portfolios against downside risk, and short-sellers concerned with the upside risk of renewable energy investments.