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This study attempts to find out the possible opportunities for the investors of Pakistan Islamic market to maximize the benefits of divergence. Dow Jones Islamic market returns (DJIMR) of four different regions named as Dow Jones Islamic Americas, Dow Jones Islamic European, Dow Jones Islamic Asian Pacific and Dow Jones Islamic Middle East and North Africa Regions across the Pakistan Karachi Meezan Index-30 have been used to capture the approach of diversification benefits. According to objectives, Multivariate GARCH--Dynamic Conditional Correlation (DCC) model is applied and it is suggested that local investors of Pakistan should prefer to invest in Asian pacific region, then to Americas region and further Middle East and North Africa region and least preference should be given to European region to maximize benefits from diversification. In order to capture the change in diversification benefits during various stock holding horizons, Continuous wavelet transformation-CWT is applied and results have indicated insignificant relationship/correlation between two markets (local and international markets of all regions) for short period of holdings rather medium and long term holdings period. Indeed, this study has focused on advance concept of incorporating the role of stock holding horizons while determining the benefits of diversification which has greater implications in the field of portfolio diversification. [ABSTRACT FROM AUTHOR]

Risk and return analysis plays a significant role in investor's decision making process. The present study investigates the influence of risk on financial performance of each financial market such as capital market, bond market, derivatives market foreign exchange market of Pakistan. Investor needs to invest money in the assets where risk is less. This means that investor would like to see risk and return exploration of all financial markets before buying financial assets. This requires in-depth analysis of financial performances of all financial markets for decision making under risk and uncertainty. Data mining technique considered to be very successful in order to evaluate the financial performances of all financial markets to generate useful information and knowledge. For the analysis in this research, three algorithms are designed; j48 decision tree classifier, linear regression and financial forecasting. The study shows statistically significant results that investment in capital market produces statistically significant desirable outcomes and the impact of risk on capital market's returns is statistically significant. Out of four financial markets capital market is performing best with 99% coefficient correlation then comes bond market with 93% coefficient correlation. Foreign exchange market stands on third position with 91% coefficient correlation then comes derivatives market with 87% coefficient correlation. Furthermore in future capital market returns will be consistent while derivatives market will produce high returns in future. [ABSTRACT FROM AUTHOR]

The objective of this study is to examine a relationship among agriculture, manufacturing, services sectors, and Gross Domestic Product (GDP) growth in Pakistan. In order to explore this relationship, Time Series data has been taken for the period of 1989 to 2012. This study employed the Econometrics technique to investigte a relationship between sector shares and economic growth. In order to select the best technique, Vector Error Correction Model (VECM) is applied. Wald Test is used to check the short run Causality among variables (i.e., agriculture, manufacturing, services, and GDP). VECM confirmed that there is a long run Causality from agriculture, manufacturing, and services sectors to GDP in Pakistan. There is a short run Causality from manufacturing and services sectors to GDP and same applies for GDP to agriculture and manufacturing sectors. But there is uni-directional Causality from manufacturing sector to GDP and from services sector to agriculture sector. Findings of the study exhibit that GDP will be positively influenced due to increase in agricultural and manufacturing, whereas services sector does not influence GDP but GDP influences services sector in Pakistan. [ABSTRACT FROM AUTHOR]