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#BuyTheInvasion - The Impact of Invasions on the Invaders Index and Global Defense Stocks

Sjödahl, Jacob LU (2022) NEKN02 20221
Department of Economics
Abstract
As the 2022 invasions of Ukraine occurred, many tweets suggested that it was a prominent opportunity to invest and claimed that historically it has been profitable to invest during invasions. The encouraged placement of the investment was in the country committing the invasion and that is the starting point for this paper. Which is, furthermore, expanded to also investigate the performance of a global portfolio containing defense stocks. The method to analyze anomalies for the returns is the event study approach for different time horizons. The expectations and explanations for the presence of abnormal returns find support from other papers investigating stock returns during geopolitical risk and papers describing market psychology. In... (More)
As the 2022 invasions of Ukraine occurred, many tweets suggested that it was a prominent opportunity to invest and claimed that historically it has been profitable to invest during invasions. The encouraged placement of the investment was in the country committing the invasion and that is the starting point for this paper. Which is, furthermore, expanded to also investigate the performance of a global portfolio containing defense stocks. The method to analyze anomalies for the returns is the event study approach for different time horizons. The expectations and explanations for the presence of abnormal returns find support from other papers investigating stock returns during geopolitical risk and papers describing market psychology. In addition to that, studies of macroeconomics during war are also presented. The event study shows that the country-specific index has the largest mean abnormal return for a 6-month horizon from investing in invasion day zero. Which for the defense portfolio happened at the 3-month horizon. It is, however, many times that the abnormal return is negative for specific events. (Less)
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author
Sjödahl, Jacob LU
supervisor
organization
course
NEKN02 20221
year
type
H1 - Master's Degree (One Year)
subject
keywords
Event Study, Abnormal Return, Invasion, Defense Stocks
language
English
id
9090800
date added to LUP
2022-10-10 09:35:47
date last changed
2022-10-10 09:35:47
@misc{9090800,
  abstract     = {{As the 2022 invasions of Ukraine occurred, many tweets suggested that it was a prominent opportunity to invest and claimed that historically it has been profitable to invest during invasions. The encouraged placement of the investment was in the country committing the invasion and that is the starting point for this paper. Which is, furthermore, expanded to also investigate the performance of a global portfolio containing defense stocks. The method to analyze anomalies for the returns is the event study approach for different time horizons. The expectations and explanations for the presence of abnormal returns find support from other papers investigating stock returns during geopolitical risk and papers describing market psychology. In addition to that, studies of macroeconomics during war are also presented. The event study shows that the country-specific index has the largest mean abnormal return for a 6-month horizon from investing in invasion day zero. Which for the defense portfolio happened at the 3-month horizon. It is, however, many times that the abnormal return is negative for specific events.}},
  author       = {{Sjödahl, Jacob}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{#BuyTheInvasion - The Impact of Invasions on the Invaders Index and Global Defense Stocks}},
  year         = {{2022}},
}