A Study on Correlation Between Indian Stock Indices of BSE and American Stock Iodice NASDAQ at Ventura Securities Ltd.

Abstract

This research project emphasizes on nature & characteristics of Indian Stock exchange BSE & its indices & American stock exchange NASDAQ & its indice NASDAQ100 & the relationship between them. The inter-relationship between the stock exchanges is one of the factors that should be timely evaluated to avoid negative impacts. Each country’s economy will directly or indirectly impact upon other country’s economy. At present, all the world markets are interdependent as trading takes place worldwide. Hence, it is necessary to study closely how markets are related to each other. For analysis purpose daily closing prices of selective indices were recorded, Multip1e Correlations has been calculated for the stockmarket indices. Statistical implication 0f the correlation has been recorded by means of t-test. The output of this study implies the view that there exists a correlation between India & USA financial markets. All the indices of BSE have witnessed a weak correlation which has been estimated by very low Co-efficient of variation. The observed findings would be useful f0r the investors, stock exchange administrators & policy makers as these provide proof of timely changes in nature 0f stock market & volatility in India. Investment decisions mainly depend upon the investor’s attitude towards risk & return of each of the avenues of investment. Hence, this study is useful for the individuals who are looking to invest and diversify their portfolio.