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ARTÍCULO
TITULO

Risk Measures and Contagion Matrix: an Application of CoVaR for the Brazilian Financial Market

Aléssio Tony Cavalcanti de Almeida    
Bruno Ferreira Frascaroli    
Danilo Regis da Cunha    

Resumen

The main point of this work is to assess how a financial distress in return series of the major Brazilian companies assets and relevant domestic market (Ibovespa) and main international index (Dow Jones) interact with each other, in an attempt to capture spillover effects. We try to capture the systemic risk, the contagion effect and the stress test. This paper uses the methodology CoVaR, described in the Adrian and Brunnermeier (2011) which use quantile regression. The main innovation of this work is the construction and estimation of the contagion matrix to domestic capital market. The results show that there is no relationship between risk measurements given by Value at Risk (VaR) and CoVaR, moreover the systemic risk shows those assets that generate more negative externalities for the domestic financial market. The stress test indicates that a distress in domestic market indicator returns have more spillover effects on domestic papers than a distress in the international market returns. Finally, the contagion matrix reveals that the interrelationships of contagion between the firms? returns are relevant sectorial evidence for assessment and management of risks.

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