UPDATE: Benefits of International Portfolio Diversification
If equity markets are in fact integrated, an unexpected event in one market may influence not only returns, but also volatility (measured by standard deviation) in the other markets.
If equity markets are in fact integrated, an unexpected event in one market may influence not only returns, but also volatility (measured by standard deviation) in the other markets.
Knowing the correlations between the returns of various national markets is important for the process of allocating investments among these markets.