When US stock market rises, invest in Bucharest

The Bucharest Stock Exchange BET index boasts the strongest correlation to the US S&P 500 of all stock exchange indices in the region, as when S&P 500 goes up 1% in one month, the BET index rises by 1.55% on average. For an investor, this means the Bucharest market is providing the biggest yields in the region against the US stock market trend and that its direction is quite easy to predict on the basis of US trends. An investor could thus make forecasts about the US market and invest on the Bucharest Stock Exchange (BSE) to get higher yields. The correlation coefficient (Beta) usually applies to a share or stock portfolio and gauges its sensitivity to that of the overall market. In this case, though, Beta measures the sensitivity of markets in the region to the trend of the US stock market. A conclusion that can be drawn is that though the BSE is one of the most volatile in the region, the short-term moves of market indices are not chaotic, but are closely following global trends.