International Diversification and Performance Prediction in Equity Investing

This thesis focuses on several aspects of international equity investing. The research shows foreign exchange risk is significant in most countries, especially in times of higher volatility, and should be an important consideration for investors. The correlation across international markets has seen a steady increase over time, with peak correlation during the Great Recession. The increased correlation makes investors look beyond developed markets, shifting focus to smaller emerging markets. Lastly, the prediction of daily performance proved to be a difficult task, especially for smaller markets