What does this research mean for the field?

Conventional, Islamic, and ESG stock indices effectively hedge against geopolitical and economic policy uncertainties during extreme market conditions, but are ineffective at hedging against financial uncertainties such as crude oil and implied stock volatility. Novelty: ClaimNovelty.NOVEL_FINDING. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To assess the dynamic relationships, interconnectedness, and hedging performance of conventional, Islamic, and ESG stocks across financial, non-financial, and economic policy uncertainties.

September 10, 2026International Journal of Islamic and Middle Eastern Finance and Management

Hedging in uncertainty: a quantile coherency approach to Islamic, ESG, and conventional stock resilience

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Authors

MRMustafa Raza Rabbani MHMd. Bokhtiar Hasan DKDestan Kırımhan

Discussion

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Overview

Econometric analysis reveals hedging resilience in Islamic, ESG, and conventional stocks, indicating protection against geopolitical risk but vulnerability to financial volatility.

Key Points

To assess the dynamic relationships, interconnectedness, and hedging performance of conventional, Islamic, and ESG stocks across financial, non-financial, and economic policy uncertainties.
Applied Baruník and Kley's quantile coherency framework to evaluate frequency- and quantile-dependent co-movements during typical and extreme market conditions.
Conducted robustness testing using impulse response functions and dynamic conditional correlation (DCC)-GJR-GARCH models.
Indices displayed positive co-movement with non-financial uncertainties at extreme low and high quantiles over yearly frequencies, confirming effective hedging against geopolitical risks.
Stock returns showed significant positive correlation with economic policy uncertainty at monthly frequencies during bearish market phases.
Conventional, Islamic, and ESG returns correlated negatively with financial uncertainties, indicating limited capacity to hedge against crude oil and implied stock market volatility.

Cite This Study

Rabbani et al. (2026) studied this question.

synapsesocial.com/papers/6aa27ae958559d80afc73c4e https://doi.org/10.1108/imefm-06-2025-0479

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September 10, 2026International Journal of Islamic and Middle Eastern Finance and Management

Hedging in uncertainty: a quantile coherency approach to Islamic, ESG, and conventional stock resilience

View Full Paper

Ask AI

Bookmark

Authors

MRMustafa Raza Rabbani MHMd. Bokhtiar Hasan DKDestan Kırımhan

Discussion

Member takes

Overview

Econometric analysis reveals hedging resilience in Islamic, ESG, and conventional stocks, indicating protection against geopolitical risk but vulnerability to financial volatility.

Key Points

To assess the dynamic relationships, interconnectedness, and hedging performance of conventional, Islamic, and ESG stocks across financial, non-financial, and economic policy uncertainties.
Applied Baruník and Kley's quantile coherency framework to evaluate frequency- and quantile-dependent co-movements during typical and extreme market conditions.
Conducted robustness testing using impulse response functions and dynamic conditional correlation (DCC)-GJR-GARCH models.
Indices displayed positive co-movement with non-financial uncertainties at extreme low and high quantiles over yearly frequencies, confirming effective hedging against geopolitical risks.
Stock returns showed significant positive correlation with economic policy uncertainty at monthly frequencies during bearish market phases.
Conventional, Islamic, and ESG returns correlated negatively with financial uncertainties, indicating limited capacity to hedge against crude oil and implied stock market volatility.

Cite This Study

Rabbani et al. (2026) studied this question.

synapsesocial.com/papers/6aa27ae958559d80afc73c4e https://doi.org/10.1108/imefm-06-2025-0479

Also Consider

Synapse has enriched one closely related paper. Consider it for comparative context:

1Geopolitical risks, uncertainty, and stock market performance2022 · 88 citations

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