Recent development in copula and its applications to the energy, forestry and environmental sciences

Abstract

In recent years, copula models are being used in all areas of human endeavors including energy, environment, social, natural and physical sciences. Copulas are the most powerful tools that can model dependent structures between various complex correlated variables. In this paper, we specificall examine the development of copula models and their appli- cations in the areas of energy, fuel cells, forestry and environmental sciences. It reviews the latest literature on the types of copula models, including Gumbel, Clayton, Frank, Gaussian, vine, and the theoretical development of a mixture of bivariate and multivariate copula distributions, in terms of both static and dynamic applications. A comparative re- view of literature is done using ARMA, DCC, and GARCH models relative to copulas.