Meaning CONTAGION: Excess correlation of equity or bond returns. For example, under usual conditions we might observe a certain level of correlation of market returns. A period of contagion would be associated with much higher-than-expected correlation. Some examples are the conjectured contagion in East Asian markets beginning in July 1997 when the Thai currency devalued and the impact across many emerging markets of the Russian default. Contagion is difficult to identify because you need some sort of measure of the expected correlation. It is complicated because correlations are known to change through time, for example, see Erb, Harvey and Viskanta's article in the 1994 Financial Analysts Journal. In periods of negative returns, correlations (and volatility) are known to increase, so what might appear to be excessive may not be contagion
More terms such as Contagion in Dictionary C.
- Definition Currency Risk Sharing:
- Examples An agreement by the parties to a transaction to share the currency risk associated with the transaction. The arrangement involves a customized hedge contract embedded in the underlying transaction contagion definition.
- Definition Closed-End Mortgage:
- Examples Mortgage against which no additional debt may be issued contagion explain.
- Definition Chicago Board Of Trade (CBOT):
- Examples The largest futures exchange in the U.S., and was a pioneer in the development of financial futures and options contagion what is.
- Definition "Clean Your Skirts":
- Examples In the context of general equities, make all your obligated calls ; check with all prior obligations in a security. Often preceded by subject to contagion meaning.
- Definition Cost-Push Inflation:
- Examples Inflation caused by rising prices, usually from increased raw material or labor costs that push up the costs of production. Related: Demand-pull inflation contagion abbreviation.
