Optimizing polluting portfolios with green assets: a stochastic dominance analysis

Key Points

• Integrating green assets significantly improves the performance of polluting portfolios, enhancing returns.
• The stochastic dominance method revealed a superior strategy for portfolio optimization, especially under uncertainty.
• This analysis utilized data from financial markets to evaluate the impact of green investments on overall portfolio risk.
• Results highlight the need for financial strategies that prioritize both profit and environmental responsibility.