Title: Indices to measure relative performance across markets

Authors: Mohamed Ihab Kira

Addresses: Department of Financial Management and Accounting, Arab Academy for Science, Technology and Maritime Transport (Dokki Branch), 23 Dr. El-Sobky St., Dokki, Giza, Egypt

Abstract: The paper proposes the use of an index which measures the performance of the stock market in one country relative to that in another country. Such indices can remedy information gathering/processing inabilities or reluctances and induce investors to view financial investments in foreign markets more favourably. The indices can be a useful tool in asset allocation efforts. Options written on the indices can be used to hedge the risks of international investment. The relative performance indices can also be included in the toolkit of financial-performance-convergence researchers.

Keywords: stock market indices; relative performance; international investments; options; asset allocation; home bias; stock markets; performance measures; financial investment; foreign markets; hedging; stock market performance; performance comparisons.

DOI: 10.1504/IJFMD.2015.069980

International Journal of Financial Markets and Derivatives, 2015 Vol.4 No.2, pp.122 - 134

Received: 20 Jan 2014
Accepted: 26 Jan 2015
Published online: 19 Jun 2015 *

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