2025, Vol. 8, Issue 2

Objective: This study examines how the volatility index (VIX) relates to the performance of the Iraq Stock Exchange (ISX) throughout the COVID-19 pandemic.

Design-methodology-approach: The research employs daily observations over a three-year period (2020-2022), totaling 1,096 data points. Multiple regression models and time series analyses are applied to investigate the relationships between variables.

Findings: The analysis reveals a robust inverse association between the VIX and the Iraqi stock market index (-0.372), accompanied by meaningful effects of health-related variables linked to the pandemic. The research demonstrates how volatility shocks from international markets rapidly transmit to the Iraqi market, though the intensity of these effects differs across various phases of the pandemic.

Research limitations/implications: Given its concentration on the Iraqi market during the COVID-19 era, the research findings may not readily apply to different markets or time frames.

Practical implications: The results offer valuable tools for managing risk and forecasting volatility in frontier markets, providing useful guidance for both investors and policymakers.

Originality/value: This work addresses an important research void by offering the inaugural thorough examination of how the VIX influences the Iraqi stock market amid a worldwide health emergency, bringing together financial and health-related factors within an innovative analytical structure