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The variance of Stock A is .0036, the variance of the market is .0059, and the...

The variance of Stock A is .0036, the variance of the market is .0059, and the covariance between the two is .0026. What is the correlation coefficient?

.8776

.1224

.5010

.5642

.4918

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Answer #1

Correlation co-efficient = Covariance÷(Standard deviation of market×Standard deviation of Stock A )

= 0.0026/(0.0036×0.0059)^0.50

= 0.5642

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