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 Credit:
- Examples Money loaned contagion definition.
- Definition Compounding Frequency:
- Examples The number of compounding periods in a year. For example, quarterly compounding has a compounding frequency of 4 contagion explain.
- Definition Counterpart Items:
- Examples payments, counterpart items are analogous to unrequited transfers in the current account. They arise through the double-entry system in balance of payments accounting and refer to adjustments in contagion what is.
- Definition Cumulative Dividend Feature:
- Examples A requirement that any missed preferred or preference stock dividends be paid in full before any common dividend payment is made contagion meaning.
- Definition Cash Flow Coverage Ratio:
- Examples that financial obligations (for interest, principal payments, preferred stock dividends, and rental payments) are covered by earnings before interest, taxes, rental payments, and depreciation contagion abbreviation.
