Description:
In line with recent evidence, the pandemic outbreak engenders a significant cumulative effect on investors’ sentiment. This paper wishes to provide financial insights concerning the finance, energy, and cryptocurrency stock market segment. We adopt a two-stage methodology, combining Principal Component and wavelet analysis. The main result shows how, after the COVID-19 outbreak and especially in the short term, the co-movement between the performance of the renewable sector and the financial market has become increasingly inverse. This evidence suggests an upward integration between the two markets with emerging hedging opportunities. Furthermore, our volatility analysis shows that the financial market uncertainty (VIX) is detrimental to the development of the renewable sector. Another key finding reveals that, especially in the short term, VIX is a crucial predictor of cryptocurrency sector volatility (CVI), implying investors’ prompt reactions