A study of the dependence of stock markets in the Asia-Pacific region on countries in other regions

The relevance of this article is driven by the transformation of stock markets and increased investor interest in the Asia-Pacific region. The primary objective of this study is to identify the relationship between stock index returns within the Asia-Pacific region and those of indices in other regions. Stock index returns are inextricably linked to investment risk, and the authors also focused on this aspect in their study of Asia-Pacific stock markets. The paper analyzes 91 stock indices across five regions - Asia-Pacific, Americas, Europe, the Middle East, and Africa - for the period 2022-2024. Based on the statistical analysis, the article concludes that, despite fluctuating dynamics from year to year, a stable relationship exists between Asia-Pacific markets and African markets. While Asia-Pacific markets exhibit lower volatility relative to other markets, Asia-Pacific stock indices are less dependent on other countries than other regions’ markets are on Asia-Pacific markets. The study’s results showed that Asia-Pacific stock markets are quite risky: overall, over the analyzed period, Asia-Pacific stock market returns increased, while the standard deviation of average daily returns decreased. However, the deviation significantly exceeds the returns. A significant decrease in the correlation between the returns of Asia-Pacific stock indices and indices of other regions in terms of beta was revealed. Further research could be devoted to examining additional factors and characteristics of Asia-Pacific stock markets, as well as a more in-depth analysis and determination of the cause-and-effect relationships identified in this study.