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VOL. 11, ISSUE 6 (2025)
Cross-Border Market Dynamics: Analyzing Stock Markets Correlation among India and Major Asian Economies with a Special Focus on Pre-Recession Period
Authors
Dr. Siddhartha Sankar Saha, Rapti Deb
Abstract
The interconnectedness of stock indices has deepened considerably over
recent decades, propelled by the profound influences of eco-financial
liberalization and the advancing wave of market globalization. While associated
markets promote efficient capital allocation and enhance market liquidity, a
low degree of correlation presents opportunities for strategic investment
diversification. This study examines the nature of stock market correlations
among India and ten Asia-Pacific nations over a sixteen-year period (June 3, 2003,
to December 30, 2019), with a specific focus on the pre-crisis years (June 3,
2003, to August 2, 2007). Using Spearman Rank correlation, appropriate for
non-normal series as identified by the Shapiro-Wilk normality test, the study
finds very weak correlations between the calculated returns from daily adjusted
market closing series of India (BSE SENSEX) and the sample Asia-Pacific
economies. In contrast, low to moderate correlations were observed among the
other indices in both intervals. These findings highlight the significant
potential for portfolio diversification offered by the low correlation between
India’s stock market and those of the Asia-Pacific region.
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Pages:25-32
How to cite this article:
Dr. Siddhartha Sankar Saha, Rapti Deb "Cross-Border Market Dynamics: Analyzing Stock Markets Correlation among India and Major Asian Economies with a Special Focus on Pre-Recession Period". International Journal of Commerce and Management Research, Vol 11, Issue 6, 2025, Pages 25-32
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