the variance of stock A is .004, the variance of the market .007 and the covariance between the two is .0026. what is the correlation coefficient?
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the variance of stock A is .004, the variance of the market .007 and the covariance between the two is .0026. what is the correlation coefficient?
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- The variances of stocks A and B are 1 percentage square and 4 percentage square, respectively. If the covariance between the two stocks is 0.6 percentage square, what is the correlation? DontIf a stock's variance of return is written as σ2, then its standard deviation will be written as:If the standard deviation of stock 'A' is .25, the standard deviation of stock 'B' is .30, and the correlation between stocks 'A' and 'B' is 0.7, the covariance between stocks 'A' and 'B' is___.
- What is the correlation between returns of stock S and T, given that covariance between stocks is 2.419 and standard deviation are 1.23 and 2.21, respectively.Calculate the correlation coefficient for the portfolio using the following information: Variance of Stock X 0.08 Variance of Stock Y 0.06 Covariance is 0.05 a. 0.1042 b. 0.7217 c. 0.00024 d. 0.0693a. The standard deviation of returns is 0.30 for Stock A and 0.20 for Stock B. The covariance betweenthe returns of A and B is 0.006. The correlation of returns between A and B is:
- Which one of the following statements is TRUE? O a. If the distribution of returns for an asset has a variance of zero, then covariance of returns between that asset and the returns any other asset must equal zero. O b. The covariance allows us to gauge the strength of the relationship between stocks. O c. While the variance and the standard deviation both measure the variability of the returns, the variance is easier to interpret because it is in the same units as the returns themselves. O d. If two assets with return correlation coefficients less than one make up a portfolio, then the portfolio does not take advantage of any diversification benefits.Suppose the index model for stocks A and B is estimated with the following results:rA = 2% + 0.8RM + eA, rB = 2% + 1.2RM + eB , σM = 20%, and RM = rM − rf . The regressionR2 of stocks A and B is 0.40 and 0.30, respectively.(a) What is the variance of each stock? (b) What is the firm-specific risk of each stock? (c) What is the covariance between the two stocks?The covariance of the market's returns with the stock's returns is 0.008. The standard deviation ofthe market's returns is 0.08, and the standard deviation of the stock's returns is 0. 11. What is thecorrelation coefficient of the returns of the stock and the returns of the market?
- If beta of Stock A with market is 0.72 and and the market variance is 225 , the covariance between A and B is 202.5, beta of stock B with market is a. 1.10 b. 0.81 c. 1.20 d. 1.25Suppose the index model for stocks A and B is estimated with the following results:rA = 2% + 0.8RM + eA, rB = 2% + 1.2RM + eB , σM = 20%, and RM = rM − rf . The regressionR2 of stocks A and B is 0.40 and 0.30, respectively. Answer the following questions. (a) What is the variance of each stock? (b) What is the firm-specific risk of each stock? (c) What is the covariance between the two stocks?The covariance between the returns on two stock is 0.0425. The standard deviations of stocks A and B are 0.2041 and 0.2944, respectively. Calculate and interpret the correlations between the two assets