A nineties perspective on international diversification

Authors

  • Michael E. Hanna University of Houston2Clear Lake, 2700 Bay Area Blvd., Houston, TX 77058, USA
  • Joseph P. McCormack University of Houston2Clear Lake, 2700 Bay Area Blvd., Houston, TX 77058, USA
  • Grady Perdue University of Houston - Clear Lake, 2700 Bay Area Blvd., Houston, TX 77058, USA

DOI:

https://doi.org/10.1016/S1057-0810(99)00028-1

Abstract

Investors often look to international diversification as a means to reduce the risk of a stock portfolio while maintaining a given level of return. In this study we look at ten years of historical data from the stock markets in the G-7 countries. We see how diversification from an S & P 500 portfolio into a two-market (two-country) portfolio would have impacted the risk and return. Across this ten-year period, we find that a portfolio consisting solely of the S & P 500 dominates any portfolio that can be constructed from the S & P 500 and the major market index of the G-7 countries. © 1999 Elsevier Science Inc. All rights reserved.

Downloads

Published

1999-03-30

How to Cite

Hanna, M. E., McCormack, J. P., & Perdue, G. (1999). A nineties perspective on international diversification. Financial Services Review, 8(1), 37–45. https://doi.org/10.1016/S1057-0810(99)00028-1

Issue

Vol. 8 No. 1 (1999): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1999 JAI Press Inc.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.