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

Frequency polygon, how to draw it?

how to draw it?

Define appraisal, Define appraisal (1) The act of evaluating. (2) The appr...

Define appraisal (1) The act of evaluating. (2) The approximated value as a result of such measures. Talk about APPRAISE

Time series, what are the importances of time series

what are the importances of time series

Force, The 70-m microwave transmission tower

The 70-m microwave transmission tower

The linear regression, Print out your results and bring them with you to th...

Print out your results and bring them with you to the midterm as there will be additional questions on the midterm related to this analysis.  You must hand in your take-home by the

Construct a cumulative relative frequency plot, Examine the distributions o...

Examine the distributions of weight and height. Are there any outliers? If so deal with them appropriately. Create a new variable that divides weight into groups. Produce a tabl

Cost accounting test, i need someon to help me do my cost accounting test

i need someon to help me do my cost accounting test

Anova, How to interpret Anova

How to interpret Anova

Analytical chemistry, a prosecuting attorney in a criminal case presented a...

a prosecuting attorney in a criminal case presented as principal evidence small fragment of glass found imbedded in the coat of the accused.the attorney claimed that the

Cost accounting, I have 8 problems that I need help with. I will need to up...

I have 8 problems that I need help with. I will need to upload the files. Thanks

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