Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 12, 2023 erstellt
Description:
This paper examines the evidence of the benefits of international diversification in the Indian context. Using a time series of returns over almost three decades, we examine alternative measures of codependence for the Indian equity market and a sample of global equity markets, gold and INR-USD. We also look at evidence of risk-adjusted returns and worst-case returns for simulated portfolios of India only and portfolios with exposure to international markets/assets and show the benefits of international diversification for an Indian investor. Indian markets tend to crash together with international markets over short horizons. However, internationally diversified portfolios are more resilient over longer holding periods than purely domestic portfolios. Our results offer one possible solution to build more robust long-term portfolios in India: reduce home bias