Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper examines the relationship between idiosyncratic volatility of energy hedge funds and a range of uncertainty measures relevant to the global energy markets. Using GARCH-family models, we find a consistent negative relationship between idiosyncratic volatility and economic, climate, and energy market uncertainties. This evidence points to specialist hedge funds developing innovative hedging capabilities during energy markets transformation toward the net zero and idiosyncratic volatility associated with it, with commodity strategies demonstrating a stronger effect. Our analysis reveals non-linear interactions: increased climate policy uncertainty during high economic policy uncertainty periods is associated with larger decreases in idiosyncratic volatility. Additionally, simultaneous success of bond and commodity trend-following strategies corresponds with substantial reductions in idiosyncratic volatility, suggesting synergistic risk-management benefits.