Risk Transmission to Fintech Firms: Is WAR Different From COVID?

Farrukh Nawaz; Fakhrul Hasan; Tonmoy Choudhury; Umar Kayani

doi:10.37965/jait.2025.0815

Risk Transmission to Fintech Firms: Is WAR Different From COVID?

Authors

Farrukh Nawaz Faculty of Business Studies, Arab Open University
Fakhrul Hasan Newcastle Business School, Northumbria University https://orcid.org/0000-0002-5406-9906
Tonmoy Choudhury Rochester Institute of Technology (RIT) https://orcid.org/0000-0002-7745-0048
Umar Kayani School of Business & Quality Management, Hamdan Bin Mohammed Smart University

DOI:

https://doi.org/10.37965/jait.2025.0815

Keywords:

COVID, stock market, return, volatility, WAR

Abstract

This study’s main aim is to determine whether either the VIX (CBOE Volatility Index) in COVID-19 or the WAR, a reference to the Russian Invasion, had a more significant (negative) impact on Fintech firms’ returns. The primary research method is the DCC-GARCH model, which is used to determine the conditional correlation between Fintech firms’ returns and the VIX/OVX. We used nine Fintech firms from four different countries from December 13, 2019, to October 06, 2022. Our findings show that the VIX has an inverse impact on the returns of the Fintech sample in our study. For COVID, the war correlation remains above throughout the first half, while the situation changes during the second. We can also observe a drop in the correlation for COVID around day 30.