December 2013
Intermediate to advanced
928 pages
28h 50m
English
Jarkko Peltomäki and Michael Graham, Stockholm University, School of Business, Sweden, E-mail: jape@fek.su.se, mgr@fek.su.se
In this chapter, we take the practical approach to measure equity market correlations and propose the use of trends gaps to assess diversification benefit in global equity markets. We suggest that one should consider the prevalence of market trends to gauge the state of global stock market correlations. This is important in assessing the benefits of international diversification. The idea of our approach is that the states indicated by the prevalence can be used when assessing the benefits of international diversification. ...
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