Global Country Correlation Matrix by Sub-Regions

Navneet Kumar

January 6, 2021

Splitting global equity markets across two dimensions — level of development and geographical position — resulted in natural local-return correlation clusters. This analysis by MSCI Research, which supports the standard framework of classifying markets into developed and emerging, was supported by empirical evidence and investment practice. It also suggests that investors can seek diversification by investing in markets with different geographical locations and levels of economic development.

 Data from Dec. 31, 1998, to Nov. 30, 2020.