Abstract:
The aim of this research to clarify if there is any relationship and correlation between the Dubai-Oman crude oil (also called Fateh) and Oman stock market return and volatility with the political instability in the Middle east. This study aims to use technical financial analysis and modeling like Multivariate regression and linear regression to investigate and provide empirical evidence regarding the existence of a correlation between the aforementioned variables. To do this the author collected historical data about Dubai-Oman crude oil, that is a Middle Eastern benchmark in oil pricing to export crude oil of the Persian-Gulf to the Asia-pacific region. In addition, the historical data of the Oman stock market was extracted to achieve further information, such as to calculate the risk and volatility of the Oman stock market prices from 2008 to 2016. The data included monthly stock and Crude oil index observations and annually political stability, corruption perceptions and inflation, GDP, and constant prices. It has been collected, manipulated, and analyzed in order to provide a comprehensive report for this study The results of the present study are useful for energy policy makers, investors, and researchers for framing sound asset pricing models and making global asset allocation decisions; for the market participants in understanding the interaction of the stock markets of Middle East and African countries in relation to the crude oil market, as well as the global equity market uncertainties; and for those investors who make use of new financial tools to hedge oil price volatility risk and are potentially interested in futures and option trading on OVX.
