Question

ASAP Please! Someone help! Thank you!!! Suppose the following data set contains the monthly adjusted stock prices for technology company A, and a consumer-goods company B from 2013–2018.

Asking for Covariance and Correlation Coefficient!
Date A B

6/1/2013 43.44 63.71

7/1/2013 49.71 66.54

8/1/2013 53.60 64.98

9/1/2013 56.00 63.00

10/1/2013 60.40 67.44

11/1/2013 64.32 70.99

12/1/2013 67.69 68.55

1/1/2014 60.29 64.40

2/1/2014 63.43 66.68

3/1/2014 67.57 68.38

4/1/2014 74.39 70.08

5/1/2014 79.87 69.11

6/1/2014 85.47 67.17

7/1/2014 87.95 65.05

8/1/2014 94.37 71.73

9/1/2014 93.21 72.29

10/1/2014 99.99 75.42

11/1/2014 110.21 78.84

12/1/2014 102.66 79.43

1/1/2015 109.03 73.35

2/1/2015 119.64 74.64

3/1/2015 116.32 71.77

4/1/2015 117.00 69.58

5/1/2015 121.84 69.14

6/1/2015 117.76 69.01

7/1/2015 113.85 67.61

8/1/2015 105.91 62.66

9/1/2015 103.91 63.82

10/1/2015 112.66 67.89

11/1/2015 111.51 67.09


Date A B

12/1/2015 99.54 71.31

1/1/2016 91.98 73.42

2/1/2016 91.35 72.77

3/1/2016 103.67 74.65

4/1/2016 88.02 72.61

5/1/2016 94.90 74.09

6/1/2016 91.37 77.49

7/1/2016 99.69 79.36

8/1/2016 101.51 80.62

9/1/2016 108.82 82.92

10/1/2016 109.30 80.13

11/1/2016 106.36 76.63

12/1/2016 112.09 78.17

1/1/2017 117.49 81.53

2/1/2017 132.76 85.53

3/1/2017 139.88 84.35

4/1/2017 139.87 81.93

5/1/2017 148.80 81.31

6/1/2017 140.82 82.40

7/1/2017 145.45 84.95

8/1/2017 160.49 88.06

9/1/2017 151.36 85.80

10/1/2017 166.11 80.27

11/1/2017 169.88 83.49

12/1/2017 166.90 88.35

1/1/2018 165.11 82.90

2/1/2018 175.72 72.80

3/1/2018 166.14 73.55

4/1/2018 163.63 71.68

5/1/2018 186.86 82.31

Answer 1

9514 1404 393

Answer:

• covariance: 168.30
• correlation coefficient: 0.688

Explanation:

A spreadsheet is made for this sort of computation. Copy the data to a spreadsheet. Use the "text to columns" feature to separate the data from the dates, and to put the A and B data in different columns.

Then use the spreadsheet built-in covariance and correlation functions to find the values of interest.

In the attachment, we have hidden the middle 50 rows of data to make it easier to select the range of data required for the functions we're using. (In many spreadsheets, you can name a range, so you only need to refer to it by name.)

The formulas we used are ...

in D2: =COVAR(B2:B61,C2:C61)

in D3: =CORREL(B2:B61,C2:C61)

_____

Additional comment

Graphing calculators and spreadsheets are essential technology tools. While it can take a bit of study to learn all of the features in depth, you can usually learn enough in a few minutes to be able to make use of these tools to solve many problems. In most cases, videos are available.

The Go.ogle Sheets application works in a browser and is free. That's what was used here. Other free office-type applications (word processor, spreadsheet, and so on) are also available for download to computer, tablet, or phone. (I find it tedious to use these apps on a phone.)