From Flow to Finance: Multidimensional Volatility Connectedness of World Water Stocks

Date

2025

Authors

Rehman, M.A.
Yengin, D.
Baryshnikova, N.
Wheeler, S.A.

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Journal article

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Business Strategy and the Environment, 2025; 1-17

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Mubeen Abdur Rehman, Duygu Yengin, Nadezhda Baryshnikova, Sarah Ann Wheeler

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Abstract

Sustainable investment has emerged as a pivotal frontier in global asset management, redefining success by integrating profitability with environmental and social responsibility. This study examines the volatility spillover connectedness of water stocks with other sustainable stocks, financial assets, and commodities using 15 years of daily data from Refinitiv London Stock Exchange Group DataStream. Employing connectedness methodologies, the analysis reveals distinct patterns of interdependence. The findings underscore the volatility quantile connectedness between water stocks and other investment options, especially in the distribution tails, which signify the transmission of upside risk from water stocks. The findings appear robust, with portfolio analysis suggesting portfolio adjustments, hedging, and financial stability. These results provide valuable insights for investors, policymakers, and market participants, highlighting the dual imperatives of environmental sustainability and economic resilience, and thereby contributing to the broader climate change agenda.

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OnlinePubl

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© 2025 ERP Environment and John Wiley & Sons Ltd.

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