Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns
Purpose: This study compares developed and developing market stocks during the Russia-Ukraine crisis, a time of high geopolitical tensions. Economic downturns are complicated by geopolitical, financial, and natural disasters. A relevant case study to analyze equities market divergence under geopoli...
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| Format: | Article |
| Language: | English |
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CSRC Publishing
2023-09-01
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| Series: | Journal of Accounting and Finance in Emerging Economies |
| Subjects: | |
| Online Access: | https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/2670 |
| _version_ | 1797689577734930432 |
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| author | Syyed Ali Raza Kazmi Maujood Ali |
| author_facet | Syyed Ali Raza Kazmi Maujood Ali |
| author_sort | Syyed Ali Raza Kazmi |
| collection | DOAJ |
| description |
Purpose: This study compares developed and developing market stocks during the Russia-Ukraine crisis, a time of high geopolitical tensions. Economic downturns are complicated by geopolitical, financial, and natural disasters. A relevant case study to analyze equities market divergence under geopolitical uncertainty.
Design/Methodology/Approach: This research quantifies stock market indexes, daily returns, and volatility indicators using historical financial data. Performance indicators, volatility patterns, and risk-return characteristics are compared across established and developing market stocks. The analysis seeks to determine if geopolitical tensions during the war increased market volatility and to understand market segment reactions. The analysis uses cumulative returns, average returns, standard deviations, volatility indexes, and the Sharpe ratio.
Findings: It is found that clear geopolitical tensions during the crisis affected market volatility differently in established and new economies. This is because industrialized economies are financially stronger than developing ones. The Sharpe ratio allowed detailed market sector comparisons of risk-adjusted returns. This comparison showed investors' possible trade-offs between rewards and dangers.
Implications/Originality/Value: These findings affect investors seeking educated strategies, politicians creating effective actions, and market participants managing risks. This research improves decision-making and risk management amid economic volatility by evaluating geopolitical events and stock market behaviors.
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| first_indexed | 2024-03-12T01:47:36Z |
| format | Article |
| id | doaj.art-98d8b6c0ba8e462e90d9dce4863196f1 |
| institution | Directory Open Access Journal |
| issn | 2519-0318 2518-8488 |
| language | English |
| last_indexed | 2024-03-12T01:47:36Z |
| publishDate | 2023-09-01 |
| publisher | CSRC Publishing |
| record_format | Article |
| series | Journal of Accounting and Finance in Emerging Economies |
| spelling | doaj.art-98d8b6c0ba8e462e90d9dce4863196f12023-09-08T21:33:00ZengCSRC PublishingJournal of Accounting and Finance in Emerging Economies2519-03182518-84882023-09-019310.26710/jafee.v9i3.2670Comparing the Performance of Developed and Emerging Market Equities during Economic DownturnsSyyed Ali Raza Kazmi0Maujood Ali1Capital University of Science and Technology Islamabad, PakistanWali Khan University Mardan, Pakistan Purpose: This study compares developed and developing market stocks during the Russia-Ukraine crisis, a time of high geopolitical tensions. Economic downturns are complicated by geopolitical, financial, and natural disasters. A relevant case study to analyze equities market divergence under geopolitical uncertainty. Design/Methodology/Approach: This research quantifies stock market indexes, daily returns, and volatility indicators using historical financial data. Performance indicators, volatility patterns, and risk-return characteristics are compared across established and developing market stocks. The analysis seeks to determine if geopolitical tensions during the war increased market volatility and to understand market segment reactions. The analysis uses cumulative returns, average returns, standard deviations, volatility indexes, and the Sharpe ratio. Findings: It is found that clear geopolitical tensions during the crisis affected market volatility differently in established and new economies. This is because industrialized economies are financially stronger than developing ones. The Sharpe ratio allowed detailed market sector comparisons of risk-adjusted returns. This comparison showed investors' possible trade-offs between rewards and dangers. Implications/Originality/Value: These findings affect investors seeking educated strategies, politicians creating effective actions, and market participants managing risks. This research improves decision-making and risk management amid economic volatility by evaluating geopolitical events and stock market behaviors. https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/2670Developed MarketsDeveloping MarketsEconomic downturnsVolatilitySharpe Ratio |
| spellingShingle | Syyed Ali Raza Kazmi Maujood Ali Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns Journal of Accounting and Finance in Emerging Economies Developed Markets Developing Markets Economic downturns Volatility Sharpe Ratio |
| title | Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns |
| title_full | Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns |
| title_fullStr | Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns |
| title_full_unstemmed | Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns |
| title_short | Comparing the Performance of Developed and Emerging Market Equities during Economic Downturns |
| title_sort | comparing the performance of developed and emerging market equities during economic downturns |
| topic | Developed Markets Developing Markets Economic downturns Volatility Sharpe Ratio |
| url | https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/2670 |
| work_keys_str_mv | AT syyedalirazakazmi comparingtheperformanceofdevelopedandemergingmarketequitiesduringeconomicdownturns AT maujoodali comparingtheperformanceofdevelopedandemergingmarketequitiesduringeconomicdownturns |