Geopolitical risk in financial markets: an analysis of commodity hedging and stock returns in Europe
Journal: IRIS UNIMORE (University of Modena and Reggio Emilia)
Year: 2026

Against the backdrop of rising geopolitical uncertainty and increased commodity market volatility, this paper aims to quantify European firms' exposure to commodity price risk and to examine the effects of hedging by means of commodity derivatives. The empirical analysis is based on pooled OLS on a balanced dataset of 57 publicly listed firms operating in commodity-intensive sectors, over the period 2010–2024. Results can be summarized as follows. First, European firms exhibit a statistically si