The flow of international investments has been rapidly increasing in recent years. One of the foremost reasons for international investing is that it provides diversification which can be explained in sinple terms as selecting securities that do not move together. The main benefit of diversification is that it reduces risk (Markowitz 1952). The amount of diversification provided by investing in international equity markets is dependent on the extent of co-movement of equity markets across the globe.
Hasthak '95, Niveditha, "The Effect of Nations' Economic Linkages on the Co-Movement of their Stock Markets" (1995). Honors Projects. Paper 55.