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...

Full description

Saved in:
Bibliographic Details
Published in:International Journal of Finance & Economics 2023-04, Vol.28 (2), p.1872-1882
Main Authors: Sikiru, Abdulsalam Abidemi, Salisu, Afees A.
Format: Article
Language:English
Subjects:
COVID-19
Economic impact
gold
hedging
Hospitality industry
Pandemics
travel & tourism stocks
volatility spillovers
Citations: Items that this one cites
Items that cite this one
Online Access:Request full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary: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.
ISSN:1076-9307
1099-1158
DOI:10.1002/ijfe.2513