Global stock market diversification benefits decrease post-2008 crash, U.S. influence grows.
The 2008 stock market crash led to increased correlation between global stock markets, reducing the benefits of diversification. Using statistical techniques like PCA and G-C, researchers found that Asian markets (excluding Japan) and the rest of the world are grouped differently. The US stock market has a significant influence on European and Australasian markets, with US stock returns predicting future returns in those regions.