Risk and return relationship between Turkey and the emerging stock markets and international diversification

The aim of this study is examine the return correlations between Turkey and the emerging stock markets, and to demonstrate whether it is valid to examine the benefits of international diversification. For this purpose, the study was carried out for 21 emerging market in the period of January 4 2010-21 September 2012. The results achieved show that Turkey is quite risky in emerging markets. It is concluded that Turkey is a market preferred by risk-loving investors. Have a positive relationship with Turkey is the lowest is noteworthy that the markets Asian markets. Therefore, the lowest positive relationships with Turkey, Turkish investors have the benefit of reducing the risk of these markets benefit from portfolio diversification by adding. In this study, the relationships between the emerging markets were found to be in an upward trend. This finding indicates that reduced the benefits of diversification. Increasing relationships between these markets is linked to continue to increase integration, an increase in trade and financial liberalization.