Diversifying Consider the characteristics of the following three stocks: 

The correlation between Thumb Devices and Air Comfort is -0.12. The correlation between Thumb Devices and Sport Garb is -0.21. The cor- relation between Air Comfort and Sport Garb is 0.77. If you can pick only two stocks for your portfolio, which would you pick? Why? (LG4, LG5)

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Thumb Devices Air Comfort Sport Garb Expected Return 13% 10 10 Standard Deviation 23% 19 17