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You hold $10,000 of stock XYZ and $10,000 in cash. You are considering investing your cash in one of 4 stocks. You decide to measure
You hold $10,000 of stock XYZ and $10,000 in cash. You are considering investing your cash in one of 4 stocks. You decide to measure the correlation of each stock's returns with XYZ's returns and get the following table:
If you're most concerned with building a diversified portfolio, which stock should you invest your cash in?
StockCorrelation () with XYZ
A0.67
B0.34
C0.53
D0.21
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Managerial Finance
Authors: John Fred Weston, Eugene F. Brigham, John Boyle, Robin John Limmack
1st Edition
0039101975, 978-0039101978
