arbiter
JournalsAccount

Decentralized finance portfolio optimization: assessing green and brown investments before, during, and after COVID-19

Remy Jonkam Oben & Aliya Zhakanova Isiksal

Economic Change and Restructuring2026https://doi.org/10.1007/s10644-026-09991-7article
AJG 1ABDC B
Weight
0.50

Abstract

The amount of international capital invested in sustainability-focused investments and decentralized financial technologies has been growing fast. Thus, this research focuses on the transmission of volatility and optimal portfolio composition among decentralized finance (DeFi) assets, S&P renewable energy and technology market indices, and conventional energy commodities for the period from March 15, 2018, to August 30, 2024. The sample period was divided into three sub-periods to examine the impact of COVID-19, which increased in parallel with the adoption of DeFi and a focus on sustainability: pre-COVID, during-COVID, and post-COVID. This research utilizes the Diebold-Yilmaz and Baruník-Křehlík techniques for time-and frequency-domain analyses, and the Dynamic Conditional Correlation model for portfolio optimization. First, the findings reveal that DeFi tokens (sustainable markets) (brown investments) display moderate (high) (very low) internal connectedness. Second, DeFi tokens demonstrate very low volatility connectedness with both sustainable and brown markets, which suggests strong diversification effects. Third, volatility connectedness among sustainable markets and conventional energy commodities is equally low. Fourth, sustainable markets (conventional energy commodities) make the highest (lowest) contribution to total volatility connectedness, and they operate as net transmitters (receivers) of volatility. Moreover, the total volatility connectedness is 33.7%, which is relatively low, suggesting significant opportunities for diversification of investment portfolios. Furthermore, the outcomes for optimal portfolio weights present greater allocations to green markets compared to conventional energy commodities and DeFi assets, revealing an escalating global transition toward sustainability. Additionally, COVID-19 significantly influenced volatility transmissions and portfolio allocations.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1007/s10644-026-09991-7

Or copy a formatted citation

@article{remy2026,
  title        = {{Decentralized finance portfolio optimization: assessing green and brown investments before, during, and after COVID-19}},
  author       = {Remy Jonkam Oben & Aliya Zhakanova Isiksal},
  journal      = {Economic Change and Restructuring},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1007/s10644-026-09991-7},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Decentralized finance portfolio optimization: assessing green and brown investments before, during, and after COVID-19

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.