From time to time I get asked if it is better to look at global equities as a selection of different countries or as a selection of different sectors. The underlying question is usually if it is better to think of markets as local (in which case stocks within a country should be more correlated than stocks of the same sector globally) or global in nature (in which case stocks of the same sector should be more correlated with each other than stocks in a country).
Are stock markets global or local – or both?
Are stock markets global or local – or both?
Are stock markets global or local – or both?
From time to time I get asked if it is better to look at global equities as a selection of different countries or as a selection of different sectors. The underlying question is usually if it is better to think of markets as local (in which case stocks within a country should be more correlated than stocks of the same sector globally) or global in nature (in which case stocks of the same sector should be more correlated with each other than stocks in a country).