THE TIME DEPENDENCE AND INTERCONNECTEDNESS OF DEVELOPED STOCK MARKETS

This study examines the interconnectedness in developed stock markets by fo- cusing on the time dependence of their multi-vocal relationships. Conceptually, we discuss the differences between financial contagion, interconnectedness and dominance in order to highlight the argument that stock markets are functionally connected. For capturing the shifts in markets’ correlation patterns over time, and their frequencies, we employ a method- ology in the framework of Wavelet Local Multiple Correlation (WLMC). We have involved in the analysis three developed stock markets, on a long-time span from 2005-2024. Our find- ings suggest that the correlation pattern displays significant variations over time at different frequencies.