Stability and similarity in financial networks—How do they change in times of turbulence?

Diversified portfolios are a key component of modern portfolio theory, based on the idea choosing uncorrelated or unrelated stocks to minimize risk. With this in mind, we use networks study correlations between and how varies over time, using daily returns from S&P500 (US), FTSE100 (UK) DAX30 (Germany). We both full correlation those filtered PMFG method. conclude that tend become more similar during times market disruption for US UK markets — implying nodes were once dissimilar (and therefore good choice low risk portfolio) no longer so, demonstrating difficulties diversified portfolio. Furthermore, these also stable by certain measures periods disruption, contrary expectations. However, apply less PMFGs German market.