Which one of these measures the interrelationship between two securities?
A)Standard deviation
B)Variance
C)Beta
D)Covariance
E)Alpha

Question

Quizplus · Accepted Answer

Covariance measures the interrelationship between two securities by calculating how much they move together. A positive covariance indicates that the securities move together, while a negative covariance indicates they move in opposite directions. Standard deviation and variance measure the volatility of a single security, while beta measures the systematic risk of a security relative to the market. Alpha measures the excess return of a security compared to its benchmark.

Which One of These Measures the Interrelationship Between Two Securities