Does International Diversification Work Better for Real Estate than for Stocks and Bonds?

        International diversification is now an establishedfactfor stock and bond portfolios. For real estate shares, however, this acceptance has sofar not been the case. This study is an investigation of the effectiveness of international real estate diversification relative to international diversification of stock and bond portfolios. Tests of international
correlation matrixes of real estate returns, common stock returns, and bond returns indicates ignificantlyl owerc orrelationsb etweenn ationalr eale state returnst han between common stock or bond returns. The implication is that international diversification reduces the risk of a real estate portfolio more than that of common stock and bond portfolios.