Correlation Analysis of Financial Contagion: What One Should Know Before Running a Test



Fig. 1b - Stock market volatility


(daily returns, 3M exp. mov. average)


0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00


0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00


United States


Irillllllllllllllllllllllllllllllllllllllllillllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999


Japan


Iiiiiiiiiiiiiiiiiii


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999


0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00


France


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999


0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00


0.30

0.25

0.20

0.15

0.10

0.05

0.00


Italy


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999


United Kingdom


Tiï Iiiiiiiiiiiiiiiiiiiiiiiiii Iiiiiiiii Iiiiiiiiii ≡≡ Iiiiiiiiiiiiiiiiiiiiiiтаτrшта ιιιιιιιιι


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999


0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00


Canada


I Iiiiiiiiiiiiiiiiiiiiiiiiiiii Iiiiiiiiiii Iiiiiiiiiiii iiiiiiiγ


Irilllllllllllllllllllllllllll


Iiiiiiiiiiiiiiiiiiiiiiii


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999


0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00


Euro area


1990 1991 1992 1993 1994 1995 1996 1997 1998 1999




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