MSCI Country Momentum Index Correlations

In MSCI Country Index Correlations, we looked at country index correlations through time. Here is a quick update that “flattens” out the rolling correlation of the momentum versions of these indices with the MSCI INDIA MOMENTUM Index.

Three-year Rolling Correlations

MSCI Country Momentum Index 3-year Rolling Correlations

Five-year Rolling Correlations

MSCI Country Momentum Index 5-year Rolling Correlations

Take-away

Momentum is a lose proxy for sentiment and the tides of optimism floats all boats. All equity markets are correlated with each other – some strongly (HONG KONG) and some weakly (CANADA.)

The median correlations across both 3- and 5-year rolling periods are greater than +0.70 between INDIA MOMENTUM and EMERGING MARKETS MOMENTUM.

Cumulative Returns of INDIA and EM MOMENTUM (MSCI)

No market is an island. Sentiment is tail that wags the dog.

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