If you combined equal dollar amounts of two stocks, each with an expected return of 3% and a correlation coefficient of 1 in a portfolio, the portfolio would be characterized by a standard deviation of 3% and an expected return of 1.50% standard deviation of 0% and an expected return of 3% standard deviation of 3% and an expected return of 0% standard deviation of 0% and an expected return of 0% standard deviation of 0% and an expected return of 1.50%