Global Portfolio Diversification with Emerging Stock Markets

<p><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: SimSun; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA; mso-bidi-font-weight: bold;" lang="EN-US">Because of their low correlation with each other and with developed stock markets, emerging stock markets are generally mentioned as attractive portfolio diversification prospects for global investors. In this paper, we use the Principal Components Analysis (PCA) method to study the global portfolio diversification opportunities for the investors of seven developed stock markets in twenty emerging stock markets with data for the January 1, 2003-January 1, 2014 period</span>.