Energy Reports (Jun 2022)
The companies in the European energy sector: Hierarchical Tree Analysis
Abstract
The energy stock market is characterized by high returns and strong volatility, and little is known about possible interactions between these companies in the literature. We studied the time series of 18 European energy companies’ daily stock prices during 2008–2018, including oil and natural gas prices. To analyze the relationship between the companies’ stocks in the study, the Minimal Spanning Tree Method was used. Results pointed that companies like Engie and OMV, ENI, and Total possibly promote cooperation dynamics, namely clustering. Iberdrola, Total, and OMV companies play an essential role in the network, as an element of linkage and influence that can coordinate the information between the companies’ stocks. Displaying the most relevant links and interactions between them is important for financial market investors and policymakers in terms of competitiveness.
