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Relationship between Crude Oil Price Changes and Airlines Stock Price: The Case of Indian Aviation Industry

Author

Listed:
  • Chinnadurai Kathiravan

    (Department of Commerce and Financial Studies, Bharathidasan University, Tiruchirappalli, Tamil Nadu, India,)

  • Murugesan Selvam

    (Department of Commerce and Financial Studies, Faculty of Management, Bharathidasan University, Tiruchirappalli, Tamil Nadu, India)

  • Balasundram Maniam

    (Sam Houston State University, Texas, USA)

  • Sankaran Venkateswar

    (School of Economics and Business Administration, Saint Mary s College of California, USA)

Abstract

The present study investigated the relationship between airline stock price and crude oil price. For this study, six airlines such as Air India, Go Air, IndiGo, Jet Lite, Jet Airways and Spice Jet and three crude oil markets, WTI-West Texas Intermediate and Texas Light Sweet, Brent -North Sea Brent Crude, and Dubai-Dubai Crude, were selected Based on their market capitalization. According to empirical results, a Crude oil price triggered fluctuations in most of the airline stock returns. Moreover, Air India, IndiGo, Jet Airways and Spice Jet experienced statistically significant relationships between their stock returns and crude oil price but did not correlate with them during the study period from January 1, 2007 to November 30, 2018. The findings of present study would be useful for individual and institutional investors and policy makers.

Suggested Citation

  • Chinnadurai Kathiravan & Murugesan Selvam & Balasundram Maniam & Sankaran Venkateswar, 2019. "Relationship between Crude Oil Price Changes and Airlines Stock Price: The Case of Indian Aviation Industry," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 7-13.
    • Handle: RePEc:eco:journ2:2019-05-2
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    References listed on IDEAS

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    Cited by:

    1. Bartosz Lamasz & Natalia Iwaszczuk, 2020. "Crude Oil Option Market Parameters and Their Impact on the Cost of Hedging by Long Strap Strategy," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 471-480.
    2. Vesarach Aumeboonsuke, 2021. "Commodity Prices and the Stock Market in Thailand," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 34-40.
    3. Chinnadurai Kathiravan & Murugesan Selvam & Balasundram Maniam & Leo Paul Dana & Manivannan Babu, 2023. "The Effects of Crude Oil Price Surprises on National Income: Evidence from India," Energies, MDPI, vol. 16(3), pages 1-16, January.
    4. Soudeep Deb, 2023. "Analyzing airlines stock price volatility during COVID‐19 pandemic through internet search data," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1497-1513, April.

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    More about this item

    Keywords

    Crude Oil Price; Airline Stock Return; Descriptive Statistics; Unit Root Test; Correlation Matrix; Granger Causality Test.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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