User Account

All Pages

Co-relation, statistics, Basic Statistics

Assignment Help:
Co-relation:
Co-relation in this case studies the behavior how each of the investment opportunity would react to any event vis – a vis each other. The same is measured in terms of co-relation coefficient. This gives the opportunity to the investor to diversify the investment and thus mitigate the risk.
Diversification is most effective when the correlation between the investments is –1 and it is least effective when the correlation is +1. As a result, if you want to reduce the risk of your portfolio as much as possible, you need to look for pairs of investments that have a correlation close to –1. A positive correlation means that two markets will move in tandem with each other. An up-move in one market will occur with an up-move in another market.
In our case correlation is 0.62 which is positive correlation indicating same direction for both markets. Thus investment in both markets will not help in reducing overall risk of portfolio.

Thus considering mean, standard deviation and correlation coefficient of both the markets it is advisable to invest in S&P market since it has positive rate of return with lower standard deviation. Further positive correlation coefficient does not suggest that diversification will result in reduction of risk.

Related Discussions:- Co-relation, statistics

Square root, (39.75-(39)/2/(sqrt+25))

(39.75-(39)/2/(sqrt+25))

.Difference between histograms and historigrams, Difference between histogr...

Difference between histograms and historigrams

Optical, How to combine two prisms to produce deviation without dispersion ...

How to combine two prisms to produce deviation without dispersion ?

Linear programming., what are the requirements of linear programming?

what are the requirements of linear programming?

What is appropriate and parametric statistical procedure , Questions 1....

Questions 1.  What would be the appropriate statistical procedure to test the following hypothesis:  "Triglyceride values are a good predictor of weight in obese adults." 2.

Calculate the expected profit and probability , An individual has $ 100 ini...

An individual has $ 100 initially. He repeatedly plays a game of chance in which he earns $ 100 with probability 0.8 or loses $ 100 with probability 0.2. The stops playing at the f

Allowable moving costs , Allowable moving costs Except as mentioned in Sub...

Allowable moving costs Except as mentioned in Subsection 60.20.20 and within certain restrictions, allowable moving costs involve the prices associated with moving family products

Estimate the probability , The Video Club Martin rents movies at "regular p...

The Video Club Martin rents movies at "regular price" andat  "half price". Usually if the films are regularly priced one day, they will be at regular price the next day with probab

.index numbers, Explain different index numbers

Explain different index numbers

Calculate and interpret, U.S. College presidents have described alcohol abu...

U.S. College presidents have described alcohol abuse as the number one problem on campus.  How common is it?  As a super crackerjack student, you conducted a survey of 17,096 stude

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd