61 3 DYNAMIC VOLATILITY AND SHOCK INTERACTIONS BETWEEN OIL AND THE U.S. ECONOMIC SECTORS Geoffrey Ngene Assistant Professor of Finance. Stetson School of Business and Economics. Mercer University Jennifer Brodmann Doctoral Candidate. Department of Economics and Finance. University of New Orleans M. Kabir Hassan Corresponding Author. 2016 IDB Laureate in Islamic Banking and Finance. Professor of Finance and Hibernia Professor of Economics and Finance and Bank One Professor in Business. Department of Economics and Finance. University of New Orleans https://doi.org/10.26870/jbafp.2018.01.002 SUMMARY: I. INTRODUCTION. II. LITERATURE REVIEW. III. DATA. IV. METHODOLOGY. V. RESULTS AND DISCUSSION. 1. PORTFOLIO AND RISK MANAGEMENT. 2. RISK PARITY APPROACH TO RISK MANAGEMENT. VI. ROBUSTNESS CHECKS. VII. CONCLUSIONS AND POLICY IMPLICATIONS. VIII. REFERENCES. Abstract This study examines (i) the dynamic shocks and volatility interactions between each of the eleven U.S. economic sectors and the oil market; (ii) risk- minimizing optimal capital allocations between each sector and oil; and (iii) the hedging effectiveness resulting from the inclusion of oil in each sector portfolio.