The long-term relationship between the classic cars market prices and financial markets

Abstract

We analyze the long-term relationship between the classic cars market and stock
markets, from the world level to specific countries, by applying a cointegration
approach on a 23-year monthly database. The database includes the K500 Index,
nine classic cars sub-indexes and 56 MSCI indexes. The results show a significant
cointegration between classic cars markets and the Asia, Asia-Pacific, Far East and
Pacific region markets. Porsche is influenced by the Asian, European and Far East
regions, while Ferrari is mainly influenced by developed markets. During the period
preceding the crisis, only the Asia, Far East and Pacific zones influenced the price
of classic cars. This influence then extends to Europe in the post-crisis period with
a much larger number of cointegrations. The strong creation of wealth in terms of
the number of High Net Worth Individuals and Ultra High Net Worth Individuals
in Asia could support this trend. We suggest that our approach can be taken into
consideration in classic cars price forecasting and portfolio diversification strategy