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Do Oil Prices influence Non-Oil Sector Stocks in Saudi Arabia?
Finance & Accounting
Pages 10 (2510 words)
Do Oil Prices influence Non-Oil Sector Stocks in Saudi Arabia? Name University’s Name Table of Contents VIII. Research Framework.18 IX. Sources…
Appendix: Tadawul stocks and sectors distribution..............................................................30 Abstract This paper aims to study the relationship between oil companies’ stocks with non-oil sector of Tadawul All Share Index which is the major index of Saudi Arabia. The purpose of this paper is to contribute literature review by studying the relationship between different oil sector companies with the non oil sector companies. Saudi Arabia earns major chunk of revenue by exporting oil and therefore it has huge contribution in the GDP as well as play a major part in the stock index if Saudi Arabia. Saudi Arabia is the second largest exporter of oil in the world and has the second largest oil reserves in the world. Therefore, the oil sector stocks have been taken as the independent variable in order to conduct this research. Vector Autoregression has been employed in order to study the relationship between time series data for 1 year. Vector Autoregression determines if there is any association between the given variables and whether any of the variable or lagged values of variable causes any change in the other variable or lagged values of the other variable. Daily closing prices of 10 non oil sector stocks and 2 oil sector stocks have been taken in order to undertake this research. The results revealed that there is no association and interdependence between oil sector stocks and non oil sector stocks. ...
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