The correlation between stocks A and B is the:
A)covariance between A and B divided by the standard deviation of A times the standard deviation of B.
B)standard deviation A divided by the standard deviation of B.
C)standard deviation of B divided by the covariance between A and B.
D)variance of A plus the variance of B dividend by the covariance.
E)None of the above.

Question

Quizplus · Accepted Answer

The correlation coefficient (r) between stocks A and B is defined as the covariance of A and B divided by the product of the standard deviation of A and the standard deviation of B. Therefore, option A is the correct formula for calculating the correlation between stocks A and B.

The Correlation Between Stocks a and B Is The