The future of branded sportswear store formats in Germany 2030: Four images of the future

A fast changing dynamic business environment is becoming a norm today in different areas, including retailing. The aims of this study are to explore existing store formats of branded sportswear retailing and their characteristics, and to identify the trends which might shape their future. The ultimate goal, however, is to create and analyze images of the future of branded sportswear retailing in Germany 2030 by applying the methods of futures studies. As theoretical background, the cyclical theories of retail evolution have been used. Empirical material is obtained by conducting a Disaggregative Policy Delphi method based study, the aim of which is to obtain well–argued qualitative and quantitative information from experts about store format development in order to create future images based on cluster analysis. Flagship stores, Concept stores, Factory Outlets, Pop-up stores, E-commerce and M-commerce represent the diversity of store formats existing in Germany today. They have different aims, roles, and advantages which retailers try to leverage. However such trends as multichannel integration, technological enhancements, growing popularity of online channels, switching customer behaviors, customization and personalization, and economic turbulence might shape the future of sportswear retailing. Four future images constructed: “Multichannel Integration”, “Smart and Personal”, “Consumer Diversification”, and “Always Online” – describe alternative futures of German branded sportswear store formats in 2030 based on different trends, assumptions, hopes and fears. They also point out uncertainties in retailing such as cannibalization of channels, the growing power and expectations of consumers, the complexity of multichannel synergies, and the switching customer behavior. Constructed future images, thus, provide readers with an opportunity to imagine and explore alternative states of the future of branded sportswear store formats in Germany 2030. They could serve well as a tool to communicate the results to decision–makers, compare them, and to analyze to inspire and direct actions for a better future tomorrow.

Time Varying Conditional Correlation Between Stock And Bond Returns: Evidence From CIVETS Nations

This thesis estimates long-run time variant conditional correlation between stock and bond returns of CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) nations. Further, aims to analyse the presence of asymmetric volatility effect in both asset returns, as well as, obverses increment or decrement in conditional correlation during pre-crisis and crisis period, which lead to make a reliable diversification decision. The Constant Conditional Correlation (CCC) GARCH model of Bollerslev (1990), the Dynamic Conditional Correlation (DCC) GARCH model (Engle 2002), and the Asymmetric Dynamic Conditional Correlation (ADCC) GARCH model of Cappiello, Engle, and Sheppard (2006) were implemented in the study. The analyses present strong evidence of time-varying conditional correlation in CIVETS markets, excluding Vietnam, during 2005-2013. In addition, negative innovation effects were found in both conditional variance and correlation of the asset returns. The results of this study recommend investors to include financial assets from these markets in portfolios, in order to obtain better stock-bond diversification benefits, especially during high volatility periods.

Early Life Intestinal Microbiota in Health and in Atopic Eczema

Decrease in microbial contacts in affluent societies is considered to lie behind the rise in allergic and other chronic inflammatory diseases during the last decades. Indeed, deviations in the intestinal microbiota composition and diversity have been associated with several diseases, such as atopic eczema. However, there is no consensus yet on what would constitute a beneficial or harmful microbiota. The aim of this thesis was to study the microbiota development in healthy infants and to characterize intestinal microbiota signatures associated with disease status and severity in infants with atopic eczema. The methodological aim was to compare and optimize methods for DNA extraction from fecal samples to be used in high-throughput microbiota analyses. It was confirmed that the most critical step in successful microbial DNA extraction from fecal samples is the mechanical cell lysis procedure. Based on this finding, an efficient semi-automated extraction process was developed that can be scaled for use in high-throughput platforms such as phylogenetic microarray used in this series of studies. By analyzing a longitudinal motherchild cohort for 3 years it was observed that the microbiota development is a gradual process, where some bacterial groups reach the degree of adult-type pattern earlier than others. During the breast-feeding period, the microbiota appeared to be relatively simple, while major diversification was found to start during the weaning process. By the age of 3 years, the child’s microbiota composition started to resemble that of an adult, but the bacterial diversity has still not reached the full diversity, indicating that the microbiota maturation extends beyond this age. In addition, at three years of age, the child’s microbiota was more similar to mother’s microbiota than to microbiota of nonrelated women.In infants with atopic eczema, a high total microbiota diversity and abundance of butyrate-producing bacteria was found to correlate with mild symptoms at 6 months. At 18 months, infants with mild eczema had significantly higher microbiota diversity and aberrant microbiota composition when compared to healthy controls at the same age. In conclusion, the comprehensive phylogenetic microarray analysis of early life microbiota shows the synergetic effect of vertical transmission and shared environment on the intestinal microbiota development. By the age of three years, the compositional development of intestinal microbiota is close to adult level, but the microbiota diversification continues beyond this age. In addition, specific microbiota signatures are associated with the existence and severity of atopic eczema and intestinal microbiota seems to have a role in alleviating the symptoms of this disease.

Bitcoinin hajautushyödyt sijoitusportfoliossa

Tässä kandidaatintutkielmassa perehdytään Bitcoiniin sijoituskohteena hajautuksen näkökulmasta. Työssä esitellään Bitcoinin toimintaa ja valuuttakurssiin vaikuttavia tekijöitä sekä perehdytään portfolion hajautuksen teoriaan. Bitcoinin hajautushyötyjä tutkitaan empiirisesti suhteessa viiteen käytettyyn sijoituskohteeseen laskemalla keskinäisiä korrelaatioita, muodostamalla tehokas rintama sekä ratkaisemalla optimaaliset painot Sharpen luvulla mitattuna. Tutkielmassa Bitcoinin ei havaittu korreloivan minkään tutkitun sijoituskohteen kanssa. Bitcoineja sisältävän portfolion tehokkaan rintaman havaittiin puolestaan olevan merkittävästi jyrkempi kuin Bitcoineja sisältämättömän portfolion, joka osoittaa Bitcoineilla saavutettavan hajautushyötyjä. Suurimman mahdollisen Sharpen luvun portfolio saa, kun Bitcoineja sisällytetään siihen 0,51 %. Bitcoineja voi tutkielman tulosten mukaan pitää suositeltavana sijoituskohteena hajautushyötyjä hakeville sijoittajille.

Dynamic linkages of real estate and stock markets in Finland

Traditionally real estate has been seen as a good diversification tool for a stock portfolio due to the lower return and volatility characteristics of real estate investments. However, the diversification benefits of a multi-asset portfolio depend on how the different asset classes co-move in the short- and long-run. As the asset classes are affected by the same macroeconomic factors, interrelationships limiting the diversification benefits could exist. This master’s thesis aims to identify such dynamic linkages in the Finnish real estate and stock markets. The results are beneficial for portfolio optimization tasks as well as for policy-making. The real estate industry can be divided into direct and securitized markets. In this thesis the direct market is depicted by the Finnish housing market index. The securitized market is proxied by the Finnish all-sectors securitized real estate index and by a European residential Real Estate Investment Trust index. The stock market is depicted by OMX Helsinki Cap index. Several macroeconomic variables are incorporated as well. The methodology of this thesis is based on the Vector Autoregressive (VAR) models. The long-run dynamic linkages are studied with Johansen’s cointegration tests and the short-run interrelationships are examined with Granger-causality tests. In addition, impulse response functions and forecast error variance decomposition analyses are used for robustness checks. The results show that long-run co-movement, or cointegration, did not exist between the housing and stock markets during the sample period. This indicates diversification benefits in the long-run. However, cointegration between the stock and securitized real estate markets was identified. This indicates limited diversification benefits and shows that the listed real estate market in Finland is not matured enough to be considered a separate market from the general stock market. Moreover, while securitized real estate was shown to cointegrate with the housing market in the long-run, the two markets are still too different in their characteristics to be used as substitutes in a multi-asset portfolio. This implies that the capital intensiveness of housing investments cannot be circumvented by investing in securitized real estate.

Plant-Herbivore Interaction in a Fragmented Landscape: Local Adaptation and Inbreeding

Reciprocal selection between interacting species is a major driver of biodiversity at both the genetic and the species level. This reciprocal selection, or coevolution, has led to the diversification of two highly diverse and abundant groups of organisms, flowering plants and their insect herbivores. In heterogeneous environments, the outcome of coevolved species interactions is influenced by the surrounding community and/or the abiotic environment. The process of adaptation allows species to adapt to their local conditions and to local populations of interacting species. However, adaptation can be disrupted or slowed down by an absence of genetic variation or by increased inbreeding, together with the following inbreeding depression, both of which are common in small and isolated populations that occur in fragmented environments. I studied the interaction between a long-lived plant Vincetoxicum hirundinaria and its specialist herbivore Abrostola asclepiadis in the southwestern archipelago of Finland. I focused on mutual local adaptation of plants and herbivores, which is a demonstration of reciprocal selection between species, a prerequisite for coevolution. I then proceeded to investigate the processes that could potentially hamper local adaptation, or species interaction in general, when the population size is small. I did this by examining how inbreeding of both plants and herbivores affects traits that are important for interaction, as well as among-population variation in the effects of inbreeding. In addition to bi-parental inbreeding, in plants inbreeding can arise from self-fertilization which has important implications for mating system evolution. I found that local adaptation of the plant to its herbivores varied among populations. Local adaptation of the herbivore varied among populations and years, being weaker in populations that were most connected. Inbreeding caused inbreeding depression in both plants and herbivores. In some populations inbreeding depression in herbivore biomass was stronger in herbivores feeding on inbred plants than in those feeding on outbred ones. For plants it was the other way around: inbreeding depression in anti-herbivore resistance decreased when the herbivores were inbred. Underlying some of the among-population variation in the effects of inbreeding is variation in plant phenolic compounds. However, variation in the modification of phenolic compounds in the digestive tract of the herbivore did not explain the inbreeding depression in herbivore biomass. Finally, adult herbivores had a preference for outbred host plants for egg deposition, and herbivore inbreeding had a positive effect on egg survival when the eggs were exposed to predators and parasitoids. These results suggest that plants and herbivores indeed exert reciprocal selection, as demonstrated by the significant local adaptation of V. hirundinaria and A. asclepiadis to one another. The most significant cause of disruption of the local adaptation of herbivore populations was population connectivity, and thus probably gene flow. In plants local adaptation tended to increase with increasing genetic variation. Whether or not inbreeding depression occurred varied according to the life-history stage of the herbivore and/or the plant trait in question. In addition, the effects of inbreeding strongly depended on the population. Taken together, inbreeding modified plant-herbivore interactions at several different levels, and can thus affect the strength of reciprocal selection between species. Thus inbreeding has the potential to affect the outcome of coevolution.

Market anomalies and tactical asset allocation: Utilising market anomalies in multiple asset class portfolios with the Black−Litterman model

This thesis discusses the basic problem of the modern portfolio theory about how to optimise the perfect allocation for an investment portfolio. The theory provides a solution for an efficient portfolio, which minimises the risk of the portfolio with respect to the expected return. A central feature for all the portfolios on the efficient frontier is that the investor needs to provide the expected return for each asset. Market anomalies are persistent patterns seen in the financial markets, which cannot be explained with the current asset pricing theory. The goal of this thesis is to study whether these anomalies can be observed among different asset classes. Finally, if persistent patterns are found, it is investigated whether the anomalies hold valuable information for determining the expected returns used in the portfolio optimization Market anomalies and investment strategies based on them are studied with a rolling estimation window, where the return for the following period is always based on historical information. This is also crucial when rebalancing the portfolio. The anomalies investigated within this thesis are value, momentum, reversal, and idiosyncratic volatility. The research data includes price series of country level stock indices, government bonds, currencies, and commodities. The modern portfolio theory and the views given by the anomalies are combined by utilising the Black-Litterman model. This makes it possible to optimise the portfolio so that investor’s views are taken into account. When constructing the portfolios, the goal is to maximise the Sharpe ratio. Significance of the results is studied by assessing if the strategy yields excess returns in a relation to those explained by the threefactormodel. The most outstanding finding is that anomaly based factors include valuable information to enhance efficient portfolio diversification. When the highest Sharpe ratios for each asset class are picked from the test factors and applied to the Black−Litterman model, the final portfolio results in superior riskreturn combination. The highest Sharpe ratios are provided by momentum strategy for stocks and long-term reversal for the rest of the asset classes. Additionally, a strategy based on the value effect was highly appealing, and it basically performs as well as the previously mentioned Sharpe strategy. When studying the anomalies, it is found, that 12-month momentum is the strongest effect, especially for stock indices. In addition, a high idiosyncratic volatility seems to be positively correlated with country indices on stocks.

Language-specific aspects of reading acquisition: the case of Russian

We have investigated Russian children’s reading acquisition during an intermediate period in their development: after literacy onset, but before they have acquired well-developed decoding skills. The results of our study suggest that Russian first graders rely primarily on phonemes and syllables as reading grain-size units. Phonemic awareness seems to have reached the metalinguistic level more rapidly than syllabic awareness after the onset of reading instruction, the reversal which is typical for the initial stages of formal reading instruction creating external demand for phonemic awareness. Another reason might be the inherent instability of syllabic boundaries in Russian. We have shown that body-coda is a more natural representation of subsyllabic structure in Russian than onset-rime. We also found that Russian children displayed variability of syllable onset and offset decisions which can be attributed to the lack of congruence between syllabic and morphemic word division in Russian. We suggest that fuzziness of syllable boundary decisions is a sign of the transitional nature of this stage in the reading development and it indicates progress towards an awareness of morphologically determined closed syllables. Our study also showed that orthographic complexity exerts an influence on reading in Russian from the very start of reading acquisition. Besides, we found that Russian first graders experience fluency difficulties in reading orthographically simple words and nonwords of two and more syllables. The transition from monosyllabic to bisyllabic lexical items constitutes a certain threshold, for which the syllabic structure seemed to be of no difference. When we compared the outcomes of the Russian children with the ones produced by speakers of other languages, we discovered that in the tasks which could be performed with the help of alphabetic recoding Russian children’s accuracy was comparable to that of children learning to read in relatively shallow orthographies. In tasks where this approach works only partially, Russian children demonstrated accuracy results similar to those in deeper orthographies. This pattern of moderate results in accuracy and excellent performance in terms of reaction times is an indication that children apply phonological recoding as their dominant strategy to various reading tasks and are only beginning to develop suitable multiple strategies in dealing with orthographically complex material. The development of these strategies is not completed during Grade 1 and the shift towards diversification of strategies apparently continues in Grade 2.

Review of investment strategy, portfolio management, and scorecard based portfolio selection tool for direct property investments in Finland

The lack of research of private real estate is a well-known problem. Earlier studies have mostly concentrated on the USA or the UK. Therefore, this master thesis offers more information about the performance and risk associated with private real estate investments in Nordic countries, but especially in Finland. The structure of this master thesis is divided into two independent sections based on the research questions. In first section, database analysis is performed to assess risk-return ratio of direct real estate investment for Nordic countries. Risk-return ratios are also assessed for different property sectors and economic regions. Finally, review of diversification strategies based on property sectors and economic regions is performed. However, standard deviation itself is not usually sufficient method to evaluate riskiness of private real estate. There is demand for more explicit assessment of property risk. One solution is property risk scoring. In second section risk scorecard based tool is built to make different real estate comparable in terms of risk. In order to do this, nine real estate professionals were interviewed to enhance the structure of theory-based risk scorecard and to assess weights for different risk factors.

A performance analysis of conventional and fundamental exchange traded funds: ETFs and their risk-return characteristics in relation to building institutional investor’s passive portfolio

An exchange traded fund (ETF) is a financial instrument that tracks some predetermined index. Since their initial establishment in 1993, ETFs have grown in importance in the field of passive investing. The main reason for the growth of the ETF industry is that ETFs combine benefits of stock investing and mutual fund investing. Although ETFs resemble mutual funds in many ways, also many differences occur. In addition, ETFs not only differ from mutual funds but also differ among each other. ETFs can be divided into two categories, i.e. market capitalisation ETFs and fundamental (or strategic) ETFs, and further into subcategories depending on their fundament basis. ETFs are a useful tool for diversification especially for a long-term investor. Although the economic importance of ETFs has risen drastically during the past 25 years, the differences and risk-return characteristics of fundamental ETFs have yet been rather unstudied area. In effect, no previous research on market capitalisation and fundamental ETFs was found during the research process. For its part, this thesis seeks to fill this research gap. The studied data consist of 50 market capitalisation ETFs and 50 fundamental ETFs. The fundaments, on which the indices that the fundamental ETFs track, were not limited nor segregated into subsections. The two types of ETFs were studied at an aggregate level as two different research groups. The dataset ranges from June 2006 to December 2014 with 103 monthly observations. The data was gathered using Bloomberg Terminal. The analysis was conducted as an econometric performance analysis. In addition to other econometric measures, the methods that were used in the performance analysis included modified Value-at-Risk, modified Sharpe ratio and Treynor ratio. The results supported the hypothesis that passive market capitalisation ETFs outperform active fundamental ETFs in terms of risk-adjusted returns, though the difference is rather small. Nevertheless, when taking into account the higher overall trading costs of the fundamental ETFs, the underperformance gap widens. According to the research results, market capitalisation ETFs are a recommendable diversification instrument for a long-term investor. In addition to better risk-adjusted returns, passive ETFs are more transparent and the bases of their underlying indices are simpler than those of fundamental ETFs. ETFs are still a young financial innovation and hence data is scarcely available. On future research, it would be valuable to research the differences in risk-adjusted returns also between the subsections of fundamental ETFs.

The Dynamic Relationship between Finnish Stock Market and Commodities

Since different stock markets have become more integrated during 2000s, investors need new asset classes in order to gain diversification benefits. Commodities have become popular to invest in and thus it is important to examine whether the investors should use commodities as a part for portfolio diversification. This master’s thesis examines the dynamic relationship between Finnish stock market and commodities. The methodology is based on Vector Autoregressive models (VAR). The long-run relationship between Finnish stock market and commodities is examined with Johansen cointegration while short-run relationship is examined with VAR models and Granger causality test. In addition, impulse response test and forecast error variance decomposition are employed to strengthen the results of short-run relationship. The dynamic relationships might change under different market conditions. Thus, the sample period is divided into two sub-samples in order to reveal whether the dynamic relationship varies under different market conditions. The results show that Finnish stock market has stable long-run relationship with industrial metals, indicating that there would not be diversification benefits among the industrial metals. The long-run relationship between Finnish stock market and energy commodities is not as stable as the long-run relationship between Finnish stock market and industrial metals. Long-run relationship was found in the full sample period and first sub-sample which indicate less room for diversification. However, the long-run relationship disappeared in the second sub-sample which indicates diversification benefits. Long-run relationship between Finnish stock market and agricultural commodities was not found in the full sample period which indicates diversification benefits between the variables. However, long-run relationship was found from both sub-samples. The best diversification benefits would be achieved if investor invested in precious metals. No long-run relationship was found from either sample. In the full sample period OMX Helsinki had short-run relationship with most of the energy commodities and industrial metals and the causality was mostly running from equities to commodities. During the first sub period the number of short-run relationships and causality shrunk but during the crisis period the number of short-run relationships and causality increased. The most notable result found was unidirectional causality from gold to OMX Helsinki during the crisis period.

Diversificação ou especialização: uma análise do processo de mudança estrutural da indústria brasileira

Diversification or specialization: an analysis of the process of structural change of the Brazilian industry. Based on findings by Imbs and Wacziarg (2003), whose empirical study has established the existence of a U-shaped pattern in the evolution of industrial specialization relative to per capita income, this paper aimed at determining the path of structural change followed by the Brazilian industry in the last decades and at comparing it with the evidence for other countries. The conclusion is that the stage of diversification of the Brazilian industrial structure has ended at a relatively low level of per capita income.

Liquidity Risk in the Finnish Stock Market

This study explores the pricing of liquidity risk and its effect on stock returns in the Finnish stock market. In addition to that, it investigates whether there is a trend in liquidity risk. Finally, it analyzes whether the two chosen liquidity measures provide different results. The data consists of all the common shares listed in the Finnish stock market during the period of 1/1997–7/2015. To examine whether liquidity risk affects stock returns in the Finnish stock market, this study utilizes a conditional version of liquidity-adjusted capital asset pricing model (LCAPM) by Acharya and Pedersen (2005). Two recently proposed illiquidity measures – PQS and AdjILLIQ – are used in the empirical estimation to see whether there are differences in the results between the measures. The time-varying conditional liquidity risks are estimated by using a multivariate DCC-GARCH model, while the pricing of the liquidity risk is conducted by applying fixed effect panel regression. The results imply that investors in the Finnish stock market are willing to pay a premium to hedge from wealth shocks and having liquid assets during the declined market liquidity. However, investors are not willing to pay a premium for stocks with higher returns during illiquid markets. The total annualized illiquidity premiums found in the Finnish stock market are 1.77% and 1.04%, based on the PQS and AdjILLIQ measures, respectively. The study also shows that liquidity risk does not exhibit decreasing trend, and investors should consider liquidity risk in their portfolio diversification in the Finnish stock market.

ASSESSING THE PERFORMANCE OF EMERGING MARKET MUTUAL FUNDS IN CANADA

Emerging markets have received wide attention from investors around the globe because of their return potential and risk diversification. This research examines the selection and timing performance of Canadian mutual funds which invest in fixed-income and equity securities in emerging markets. We use (un)conditional two- and five-factor benchmark models that accommodate the dynamics of returns in emerging markets. We also adopt the cross-sectional bootstrap methodology to distinguish between ‘skill’ and ‘luck’ for individual funds. All the tests are conducted using a comprehensive data set of bond and equity emerging funds over the period of 1989-2011. The risk-adjusted measures of performance are estimated using the least squares method with the Newey-West adjustment for standard errors that are robust to conditional heteroskedasticity and autocorrelation. The performance statistics of the emerging funds before (after) management-related costs are insignificantly positive (significantly negative). They are sensitive to the chosen benchmark model and conditional information improves selection performance. The timing statistics are largely insignificant throughout the sample period and are not sensitive to the benchmark model. Evidence of timing and selecting abilities is obtained in a small number of funds which is not sensitive to the fees structure. We also find evidence that a majority of individual funds provide zero (very few provide positive) abnormal return before fees and a significantly negative return after fees. At the negative end of the tail of performance distribution, our resampling tests fail to reject the role of bad luck in the poor performance of funds and we conclude that most of them are merely ‘unlucky’.