TY - UNPD A1 - Müller, Carsten A1 - Behr, Patrick A1 - Orgen, Papa T1 - Portfolio Allocation and Optimization with Carbon Offsets: Is it Worth the While? N2 - We explore whether the integration of carbon offsets into investment portfolios improves perfor-mance. Our results show that investment strategies that include such offsets achieve higher Sharpe Ratios than the diversified benchmark portfolios. The efficient frontier of optimal portfolio choices is shifted upwards as a result of including compliance and voluntary carbon offsets in the portfolio. Our results also show that while diversified portfolios may benefit from carbon offsets integration, voluntary carbon offsets are significantly more sensitive to exogenous shocks than compliance carbon allowances. All these results are novel and may encourage investors to invest in such sustainable asset classes. T3 - Discussion Papers in Business and Economics - 23 KW - Carbon Offsets KW - Carbon Pricing KW - Climate Finance KW - Portfolio Allocation and Optimization KW - Volatility Spillover Y1 - 2023 UR - https://fuldok.hs-fulda.de/opus4/frontdoor/index/index/docId/981 UR - https://nbn-resolving.org/urn:nbn:de:hebis:66-opus4-9816 ER -