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The Global Equity Market Reactions of the Oil & Gas Midstream and Marine Shipping Industries to COVID-19: An Entropy Analysis

Mina Nasiri, Hamed Nasiri, Saeid Nasiri, Maliheh Bitarafan, Babak Fazelabdolabadi

Abstract


This article quantifies the information flow between major equities in the Oil & Gas Midstream and Marine Shipping industries, on the basis of the effective transfer entropy methodology. In addition, the article provides the first analysis of investor fear and market expectations in these sectors, according to the Rényi entropy approach. The period of study was extended over five years to fully capture the pre/post-COVID situations. The entropy results reveal a major change in the underlying information flow pattern among equities in the Oil & Gas Midstream and Marine Shipping sectors in the aftermath of COVID-19. According to the new (post-COVID) paradigm, the stocks in the Oil & Gas Midstream and Integrated Freight & Logistics industries have gained momentum in occupying six of the ten positions within the list of the most influential equities in the market, in terms of information transmission. The disorder and randomness have decreased for over 89% of the studied equities, after virus outbreak. For the equities detected with high information-transmission standing, the Rényi entropy results indicate that investors more likely showed a higher level of future expectations and a lower level of fear regarding frequent market events within the post-COVID timeline.

 

Doi: 10.28991/HIJ-2021-02-04-07

Full Text: PDF


Keywords


Marine Shipping; Logistics; Freight Transportation; COVID-19; Entropy.

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Full Text: PDF

DOI: 10.28991/HIJ-2021-02-04-07

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Copyright (c) 2021 Babak Fazelabdolabadi, Maliheh Bitarafan, Hamed Nasiri, Mina Nasiri, Saeid Nasiri