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For a two-stock portfolio, what would be the preferred correlation coefficient between the two stocks?

User Birsen
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1 Answer

3 votes

Answer:

-1

Step-by-step explanation:

The correlation coefficient can range from -1 to 1. It measures how one stock (or security) reacts to any change in the price of performance of another stock (or security). When the correlation is -1, it means that there is no relationship between how the stocks will perform, i.e. they are completely uncorrelated.

User Fabian Werner
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