International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

 

COMOVEMENTS AND STOCK MARKET INTEGRATION BETWEEN INDIA AND ITS TOP TRADING PARTNERS: A MULTIVARIATE ANALYSIS OF INTERNATIONAL PORTFOLIO DIVERSIFICATION
Alan Harper, Zhenhu Jin

Abstract
It has been documented that strong (weak) comovements between stock markets provide less (more) diversification opportunities for investors. This study seeks to determine empirically if investors of Indian stock market can further diversify their portfolios by investing in the stock markets of India’s top trading partners.. This study uses data from India and its major trading partners to conduct principle component analysis. We find that India investors can further diversify their portfolios by investing in the stock markets of a few of its major trading partners.

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