With the sovereign debt crisis centered in the developed world, the traditional notion that all developed markets are less risky for investors than all emerging markets doesn’t hold up anymore.

Today, while developed markets certainly top the list of the least risky countries and vice versa for emerging markets, some developed markets are now just as risky as emerging markets. At the same time, some emerging countries are now just as safe as their developed market counterparts.

It’s no wonder, then, that determining how various developed and emerging markets currently stack up in terms of riskiness can be tough, especially given today’s highly volatile markets.

Figuring out the riskiness of a country, however, is very important for investors. In “risk-off” environments, the valuations of high risk countries tend to suffer more than the valuations of lower risk countries. Similarly, valuations of higher risk countries tend to benefit more in “risk-on” environments. [Emerging Market ETFs Lead Inflows]

David Wang, a researcher on my Investment Strategy Group team, recently performed an analysis that can help investors determine where in the world risk is today. Using a combination of countries’ macroeconomic characteristics and one-year market index volatility, David developed a ranking of countries’ riskiness.

Here’s his list of the top 15 riskiest countries today, i.e. the countries whose valuations are most sensitive to “risk-on” and “risk-off” sentiment shifts:

1.)    Hungary

2.)    Italy

3.)    Austria

4.)    Sweden

5.)    Poland

6.)    Finland

7.)    Spain

8.)    Germany