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. 2024 Nov 14;10(23):e40382.
doi: 10.1016/j.heliyon.2024.e40382. eCollection 2024 Dec 15.

AI companies' strategies with traditional vs. digital assets amid geopolitical and banking crises

Wael Dammak  1 , Mohamed Fakhfekh  2 , Hind Alnafisah  3 , Ahmed Jeribi  4
Affiliations

AI companies' strategies with traditional vs. digital assets amid geopolitical and banking crises

Wael Dammak et al. Heliyon. .

Abstract

The financial industry evolves rapidly, offering numerous opportunities but also introducing inherent risks that require careful navigation by institutions. This paper explores the performance of traditional and digital assets as tools for hedging, diversification, and safe-haven strategies during the Russian-Ukrainian crisis and the Silicon Valley Bank (SVB) collapse. Utilizing daily data from April 30, 2021, to September 15, 2023, and employing the Asymmetric Dynamic Conditional Correlation (ADCC) model, which combines four Generalized Autoregressive Conditional Heteroskedasticity (GARCH) family models and two residual distributions, we conduct a comprehensive analysis. The results indicate that Bitcoin's role as a safe haven is limited during the geopolitical crisis, impacting specific stocks, while gold's effectiveness varies. Digix Gold (DGX) demonstrates robust safe-haven properties, and Paxos Gold (PAXG) proves notably effective for certain stocks. Before the SVB crisis, gold primarily acts as a diversifier but later emerges as a significant safe haven during the banking crisis. These findings provide valuable insights to portfolio managers, emphasizing the importance of adaptive asset allocation in addressing financial uncertainties.

Keywords: Crises; Digital assets; Hedging; Intelligence artificial companies; Safe haven; Traditional assets.

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Conflict of interest statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

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Return evolution series.
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Correlation evolution series
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Correlation evolution series
See this image and copyright information in PMC

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