Empirical analysis reveals that Islamic finance improves portfolio performance during economic downturns, suggesting its strategic value in risk management and diversification.
Key Points
Islamic financial instruments can stabilize investments during economic downturns, offering straightforward benefits.
Islamic assets yielded higher returns with lower risk during the COVID-19 crisis, outperforming conventional assets.
The study applies a Vector Autoregressive model, analyzing market interdependencies and the impact of diversification.
Integration of Islamic indices enhances global portfolio diversification, highlighting their pivotal role in risk management.
Cite This Study
Imtithel Sendi Dhahri (2025) studied this question.