Which of the following correlations coefficients will produce the least diversification benefit?
A) -0.6
B) -0.3
C) 0.0
D) 0.8

Question

Quizplus · Accepted Answer

The correlation coefficient of 0.8 indicates a strong positive correlation and less diversification benefit compared to the other options. The closer the correlation coefficient is to -1, the stronger the diversification benefit. Therefore, the correlation coefficient of 0.0 would provide the strongest diversification benefit.

Which of the Following Correlations Coefficients Will Produce the Least