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

Measurement of central tendency, assignement

assignement

Mean - median and frequencies, Put the appropriate summary statistics, e.g....

Put the appropriate summary statistics, e.g. mean, median, frequencies, percentages, for the different variables into a table to make them concise. You can see examples of consise

Normal distribution, Lifts usually have signs indicating their maximum capa...

Lifts usually have signs indicating their maximum capacity. Consider a sign in a lift that reads “maximum capacity 1400kg or 20 persons”. Suppose that the weights of lift-users are

How Allotment is useful, How Allotment is useful An agency''s plan of appro...

How Allotment is useful An agency''s plan of approximated expenses, income, money payments, and money invoices for monthly of the biennium.

Time series, time series use in indian economy

time series use in indian economy

Cost behavior/classificationq, Shipping costs on Merchandise sold--it is a ...

Shipping costs on Merchandise sold--it is a variable cost, but is it a selling/adminstrative cost or product cost? Is it direct or indirect?

What is the lm and is curve, Consider an economy specified by the following...

Consider an economy specified by the following:       Y = PE = C + I + G + NX                            (Income identity)       C = 400 + 0.9YD

Hom, (A) Find the binomial probability P(x = 5), where n = 15 and p = 0.50....

(A) Find the binomial probability P(x = 5), where n = 15 and p = 0.50. (B) Set up, without solving, the binomial probability P(x is at most 5) using probability notation. (C) H

Measure of central tendency, What is sampling fluctuation

What is sampling fluctuation

Question from inventory, CASE STUDY 1 3 MARKS An audit of the...

CASE STUDY 1 3 MARKS An audit of the accounting records of Loch Ness Ltd. for the year ending 30 June 2012 discovered that the ending inventory balance

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