How do crude oil prices co-move?: A copula approach

A-Tier
Journal: Energy Economics
Year: 2011
Volume: 33
Issue: 5
Pages: 948-955

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper examines the dependence structure between crude oil benchmark prices using copulas. By considering several copula models with different conditional dependence structures and time-varying dependence parameters, we find evidence of significant symmetric upper and lower tail dependence between crude oil prices. These findings suggest that crude oil prices are linked with the same intensity during bull and bear markets, thus supporting the hypothesis that the oil market is 'one great pool'--in contrast with the hypothesis that states that the oil market is regionalized. Our findings on crude oil price co-movements also have implications for risk management, hedging strategies and asset pricing.

Technical Details

RePEc Handle
repec:eee:eneeco:v:33:y:2011:i:5:p:948-955
Journal Field
Energy
Author Count
1
Added to Database
2026-01-29