Correlation is the:
A)squared measure of a security's total risk.
B)extent to which the returns on two assets move together.
C)measurement of the systematic risk contained in an asset.
D)daily return on an asset compared to its previous daily return.
E)spreading of an investment across a number of assets.

Question

Quizplus · Accepted Answer

Correlation measures the extent to which the returns on two assets move together. It is a statistical measure that ranges from -1 to +1, where -1 means the returns move in opposite directions, 0 means no correlation, and +1 means the returns move in the same direction.

Correlation Is The