A Wavelet Analysis of Financial Market Performance in Major Markets

The main objective of this analysis is to show the correlated between China, India, the US and the UK financial markets. A Wavelet Coherence is used to demonstrate the strength of relationships established across the Global Financial Meltdown (GFM) and during the COVID- 19 pandemic between selected markets. The date of study varies from August 2000 to June 2020. The study's outcome indicates that the frequency of the relationship between the markets chosen varies. In comparison with China, India's stock market was heavily integrated into developed world markets, especially during the GFM and COVID-19 periods. Related to GFM during the recent COVID-19 recession, the US market continues to dominate the Indian financial markets. Knowing the significance of the relationship established over time between markets gives investors the incentives to cautiously define their diversification of portfolios strategies.