1. Two stocks, X and Y with equal proportions of funds are invested. For the following four portfolios, please explain whether these two stocks move either in the same direction, opposite direction, or uncorrelated.

In addition, which of these four portfolios can be considered as minimum variance portfolio (assume same stocks with same proportions have been invested for all four portfolios)? Please explain your answers. No calculations required.

Portfolio A: correlation between returns on X and Y is 0.7

Portfolio B: correlation between returns on X and Y is -0.2

Portfolio C: correlation between returns on X and Y is 0

Portfolio D: correlation between returns on X and Y is -0.8