A statistical measure of the degree to which securities' returns move together is called:
A) Variance
B) Correlation Coefficient
C) Standard Deviation
D) None of the above

Question

Quizplus · Accepted Answer

Correlation coefficient measures the strength and direction of the linear relationship between two variables. In finance, it is often used to measure the degree to which securities' returns move together. Variance and standard deviation are measures of dispersion or variability, but do not specifically measure the relationship between two variables.

A Statistical Measure of the Degree to Which Securities' Returns