Exploring environmental and managerial impacts of crude oil volatility on QUAD financial markets: Insights into dynamic connectedness

The QUAD nations' (United States, India, Japan, and Australia) financial markets are deeply integrated with global markets. The burgeoning surge of risk in global markets requires caution, which can be possible by determining the connectedness. This study elucidates the dynamic connectedness between crude oil and the financial markets of QUAD nations, aiming to enhance understanding of its environmental and managerial implications. This study uses Diebold and Yilmaz (2012) model for the empirical investigation. After investigation the connectedness, portfolio weight, and hedge ratio are determined to know the hedge ratio. It is found that the Japanese market and crude oil emerge as the least transmitter and least receiver of the shock, respectively. Additionally, the result reveals that hedging is most expensive in the US market while cheapest in the Australian market. This paper contributes to understanding the influence of energy market fluctuations on financial markets amidst recent global crises, such as the COVID-19 pandemic and the Russia-Ukraine conflict, with implications for both environmental and economic resilience.