Comparative analysis of precious metals as hedges for clean energy stocks

• We analyze volatility spillovers between clean energy stocks and precious metals. • We apply DCC-GARCH and Diebold-Yilmaz methods to 2014–2024 market data. • Gold offers strong, time-varying hedge benefits across clean energy sectors. • Correlations with interest rates show gold's robust North American hedge role. • Global events shape hedge effectiveness and market connectedness over time. This study investigates the dynamic interactions between clean-energy subsectors and precious metals. Using a comprehensive dataset from 2014 to 2024, we apply the Diebold and Yilmaz (2012) volatility spillover framework alongside the Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) model. The analysis reveals pronounced volatility transmissions within and between clean-energy sectors and precious metals. Precious metals, especially gold, serve as cost-effective hedges against clean-energy equities, with hedging effectiveness varying over time and across sectors. Correlation results show that gold maintains stable positive associations with US and Canadian interest rates, reinforcing its hedging potential during periods of economic uncertainty in North American markets. Conversely, weak or negative correlations with Japanese and Chinese rates suggest regional differences in hedging effectiveness. The study also highlights how global events—such as the COVID-19 pandemic and the Russia–Ukraine conflict, significantly influenced market connectedness and hedge performance, especially during periods of heightened uncertainty. These findings provide insight into the role of precious metals in clean-energy portfolio risk management, offering practical implications for investors seeking diversification strategies under volatile market conditions. By accounting for sector-specific behavior and time-varying correlations, the study enhances our understanding of hedging strategies in the clean-energy–commodity nexus.