Are renewable energy assets defensive under financial market uncertainty? Evidence from a combined PCA – wavelet – portfolio analysis

his paper examines the dynamic interaction among stock markets, renewable energy assets, and digital assets in the period following the Russian invasion of Ukraine. This study addresses a gap in the literature by jointly linking factor decomposition, time-frequency dependence, and out-of-sample portfolio performance of renewable assets. Our results show that renewable energy assets display weak and mostly non-significant exposure to financial market uncertainty, supporting their role as a defensive investment during periods of turmoil, as suggested by the additional portfolio analysis. These findings highlight the diversification benefits of clean energy investments and provide new evidence on structural changes in investor preferences under heightened uncertainty.