Measuring Dependence in Financial Crisis A Copula Approach for Mexico and Brazil

This paper studies the dependence in Mexican and Brazilian financial markets trough a method that has proved to obtain better results along with the characterization of non-linearity and asymptotic dependence than the use of simple correlation analysis: the copula approach. Using weekly returns of t...

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Detalles Bibliográficos
Autores principales: Ricardo Massa Roldán, Arturo Lorenzo Valdés
Formato: Artículo científico
Publicado: Centro de Investigación y Docencia Económicas, A.C. 2013
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Acceso en línea:http://www.redalyc.org/articulo.oa?id=32329969004
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=mx/mx-010&d=32329969004oai
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Sumario:This paper studies the dependence in Mexican and Brazilian financial markets trough a method that has proved to obtain better results along with the characterization of non-linearity and asymptotic dependence than the use of simple correlation analysis: the copula approach. Using weekly returns of the ip y c and ibov from January 1975 to November 2010 we compared the results of numerical methods that solved for the Kendalls tau in three types of copulas: the two-dimensional Gaussian copula, the bivariate Gumbel copula, and the bivariate Clayton copula. Also, we used different study periods in order to find evidence of changing dependence structures during finan - cial turmoils, like the one that occurred in 2008. This paper points out that the dependence structure between the above mentioned markets strengthened after the financial crisis of 2008.