Risk discrimination in financial markets: Example of BRICS-T countries

Risk management is to be aware of risks, to be able to foresee them and to minimize their losses or to turn these risks into opportunities. Risk management tools arising from the development of the financial system are increasing in importance day by day. Risk measurement and risk management are necessary and beneficial for companies. IRisk management is to be aware of risks, to be able to foresee them and to minimize their losses or to turn these risks into opportunities. Risk management tools arising from the development of the financial system are increasing in importance day by day. Risk measurement and risk management are necessary and beneficial for companies. In this study, to measure risk and examined the issue of separated and US markets based on the BRICS-T countries (Brazil, Russia, India, China, South Africa and Turkey) the risk of national stock market index was measured using the monthly closing data for the 2009-2018 period. S&P 500 index was chosen as the market index. Accordingly, the total risks of the national stock market indices of the BRICS-T countries are calculated and divided into systematic and non-systematic risks. In addition, beta coefficients that measure the sensitivity to market movements were calculated based on 120-month data. The study findings show that the non-systematic risks of national stock exchanges in the BRICS-T community are generally quite low, and the majority of the risk is the systematic risk factor.