Varying observation window portfolio stress test
Portfolio stress test by varying the observation window, at Seeking Alpha.
The difference in projected portfolio performance as a reflection
of the changing dynamics of foreign markets. As globalization
increases, some other economies are more coupled to the U.S.
economy and—perhaps more important—are perceived as
being more coupled to the U.S. economy. Further, as more
domestic investors put an increasingly heavy allocation into
foreign stocks, we will naturally see more coupling in returns
and there will be a decreased level of diversification effects
available from investing in many foreign economies.