What is it about?
Given shipping's pivotal role in global trade, this study investigates interdependencies between the Baltic Dry Index and various financial and commodity markets, including equities, bonds, real estate, currency, bitcoin, crude oil, natural gas, gold, silver, copper, and zinc. Using the R2 decomposed connectedness approach for the period 1/1/2012–1/31/2025, the analysis reveals moderate volatility spillovers, notably amplified by geopolitical conflict more than the health crisis.
Featured Image
Why is it important?
Key findings identify gold and equities as primary shock emitters, while currency and bonds function as major receivers. Shipping generally displays neutral behavior within the network. Portfolio analysis shows that most sampled assets significantly reduce risk for shipping investors. Conversely, shipping effectively minimizes risk for bitcoin and natural gas portfolios. Significant heterogeneity in hedging effectiveness is documented across distinct crisis episodes.
Perspectives
These results underscore the imperative for shipping investors to employ tailored hedging strategies and offer policymakers insight into shipping's contained systemic footprint on contagion dynamics.
Dr Spyros Papathanasiou
National and Kapodistrian University of Athens
Read the Original
This page is a summary of: Sailing through uncertainty: Shipping's role in financial shock transmission and hedging strategies, Global Finance Journal, September 2025, Elsevier,
DOI: 10.1016/j.gfj.2025.101159.
You can read the full text:
Contributors
The following have contributed to this page
