Cointegration Relation on Investors' Portfolio Choice at European Financial Markets: An Application for Turkey and Greece
Gülfen Tuna, Fatih Burak Gümüş

Abstract
Portfolio diversification is of vital importance to decrease risk at financial markets. It is essential to decide which financial asset must be added to optimal portfolio at national markets. In addition, it is crucial to determine which country's financial assets must be added to portfolio. While portfolio diversification is made by investors at international markets, cointegration relation is of capital importance as much as correlation degree. Scientific researches show that adding financial instruments to the same portfolio at markets without having cointegration relation is more successful than adding the one's having cointegration relation at the process of decreasing the portfolio risk. Thus, adding financial instruments to the same portfolio at markets without having cointegration features means making maximum profit at minimum risk level.

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