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Fred holds a portfolio with a 30% volatility. He decides to short sell a small amount of stock with a 40% volatility and use the

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Fred holds a portfolio with a 30% volatility. He decides to short sell a small amount of stock with a 40% volatility and use the proceeds to invest more in his portfolio. If this transaction reduces the risk of his portfolio, what is the minimum possible correlation between the stock he shorted and his original portfolio

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