How do we use correlationand covariance to manage the tradeoff between risk and return? Provide an example.
How do we use correlation and covariance to manage the tradeoff between risk and return? Provide an example.
A correlation is a single number that describes the degree of relationship between two variables. Range of correlation is from -1 to 1. For example there is a negative correlation between price and demand and there is a positive correlation between price and supply.
I want stocks that are less …
Response explains Correlation and Covariance for manage risk and return.