The oil sector is crucial to the world economy, and it is affected by a variety of factors, including political events like presidential elections. The 2016 and 2020 US presidential elections’ effects on oil and gas company stock prices are examined in this study. Techniques of statistical analysis are used to examine the connection between election results and stock market performance. This study uses data from the three months before and three months after the elections to identify any possible election-related effects. To investigate the connection between election outcomes and oil stock prices, statistical techniques are applied.
We found that oil & gas stocks went down regardless of the winner. However, we observed that the oil & gas stock prices went down less in 2016 elections where Republicans won.
Realistically, this study doesn't give us much insight since the general state of the economy and other factos such as announcments from these companies and the COVID-19's effects should also be considered. Also, there more appropiate statistical methods that are aimed at analyzing the stock market and time-series data like Hurst component analysis and ARIMA modeling. Morever, including only two election years is not enough to generalize and act on these results, more elections should be included for a "real" study.
Disclaimer: This study was for my "Statistics in Engineering (INE2002)" class' term project, therefore the methods applied are mostly from that class and do not include such advanced modeling and analysis techniques.
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