Study Findings from Universidad Francisco de Vitoria Broaden Understanding of Risk Management (The Lithium Industry and Analysis of the Beta Term Structure of Oil Companies)

2020 DEC 17 (NewsRx) -- By a News Reporter-Staff News Editor at Energy Business Daily -- Investigators discuss new findings in insurance. According to news reporting originating from Madrid, Spain, by NewsRx correspondents, research stated, “According to a statement made in the BP Energy Outlook report in 2017, most of the world’s liquid fuel (petroleum) is being consumed by the transportation industry. The mechanisms used to stimulate changes in the energy markets are affected by government policies that act in more ambitious ways than purely market-driven forces; different governments have promoted incentives involving electric mobility, especially in urban areas.”

The news correspondents obtained a quote from the research from Universidad Francisco de Vitoria: “The substitution for crude oil by renewable energy inputs in the transport sector is a major concern for oil producers. Among the different types of clean energies, lithium (Li) is currently assuming an increasingly strategic role. The goals of this paper are two-fold: First, we study the dynamics of the lithium industry and then the beta risk behavior of the 10 largest oil companies in the world for the time period between 11 February 2008 and 10 January 2019. We use an approach based on the continuous wavelet transform (CWT) method. The results indicate that there is a period of dependence between late 2013 and 2016 that occurs in the long-run frequencies of between 32 and 198 days for all cases, except for in the case of PetroChina, thereby demonstrating that the beta term is time-varying. We also find evidence that the beta term reflects and advances oil companies’ responsiveness to movements in the lithium market.”

According to the news reporters, the research concluded: “In the second part of the paper, we study the dynamics of the beta series by using long-run dependence approaches. The results indicate that the betas are highly persistent, with the order of integration found to be significantly above 1 in all cases.”

For more information on this research see: The Lithium Industry and Analysis of the Beta Term Structure of Oil Companies. Risks, 2020,8(130):130. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks8040130.

Our news editors report that more information may be obtained by contacting Manuel Monge, Faculty of Law, Business and Government, Universidad Francisco de Vitoria, E-28223 Madrid, Spain. Additional authors for this research include Luis A. Gil-Alana.

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