Healthy volatility is necessary for a stock market to function

(Nov 20): Last week, we concluded that relative volatility among stock markets is fairly consistent over time. We also explained why relative volatility and the cross-correlations or betas among the different stock markets can be helpful in managing a portfolio of stocks.

One interesting evidence is the fact that Indonesia has consistently high volatility while Malaysia has the lowest. We refresh this chart from last week (see Chart 1).

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