LOG 45g Ok, I know that the primary answer to refute the claims against international diversification is that IT IS A STATISTICAL ABERRATION AS CORRELATIONS INCREASE IN TIMES OF RISING VOLATILITY. my questoins 1) WIthout too much math, can somone explain to me why correlation increased in times of rising vol? My brain is fried. 2) Are there any other refutes you would include in a question that asked u to refute the case against international diversification? Any other key concepts here? To refresh y’all, case against benefits of int’l diversifcation are 1)correlation have increased over time 2) correlations increase in times of increased vol Why have correlatoins increased 1) multi-national co’s 2) free trade 3) increases capital flow internatoinally 4) capital mkts more integrated ps - my spelling sux…sorry
looks good
How do you LOG 45g Ok, I know that the primary answer to refute the claims against international diversification is that IT IS A STATISTICAL ABERRATION AS CORRELATIONS INCREASE IN TIMES OF RISING VOLATILITY. that this is a primary case? Schweser?
not sure, in my notes
one thing has always bothered me about this los – are those reasons why correlations have increased over time supposed to be arguments refuting the traditional case against international diversification? are they basically saying, yeah, correlations may have increased over time (reducing diversification benefits), but that’s happened because of improving conditions that should increase returns as markets become further integrated, etc??? just not sure i get how to close the loop on the logic of this as a “response” to the case against int’l.
Max same here. I cant close the loop on this one
i think we programmer types (i’m assuming you are) always have to have that nice logical closure. it’s a curse.
MaxTheDog Wrote: ------------------------------------------------------- > i think we programmer types (i’m assuming you are) > always have to have that nice logical closure. > it’s a curse. yes. Bracket open, bracket close. Whatever is logical i can remember. Whatever is not, it takes me 10 iterations to get into my head
ChiTownShane Wrote: ------------------------------------------------------- > LOG 45g > Ok, I know that the primary answer to refute the > claims against international diversification is > that IT IS A STATISTICAL ABERRATION AS > CORRELATIONS INCREASE IN TIMES OF RISING > VOLATILITY. > > my questoins > 1) WIthout too much math, can somone explain to me > why correlation increased in times of rising vol? > My brain is fried. > 2) Are there any other refutes you would include > in a question that asked u to refute the case > against international diversification? > > > Any other key concepts here? > > To refresh y’all, case against benefits of int’l > diversifcation are > 1)correlation have increased over time > 2) correlations increase in times of increased > vol > > Why have correlatoins increased > 1) multi-national co’s > 2) free trade > 3) increases capital flow internatoinally > 4) capital mkts more integrated > > ps - my spelling sux…sorry Isn’t it only a perceived increase in correl during times of increased vol and not a true increase in correls? To actually guage the increase we have to take the cross-sectional slice and see if the standard deviations have decreased (or are still large) - If large, true correl has not increased… I have that stuck in my head for some reason…