Two stocks that have the same beta ____ have the same correlation because ________.

Question

Quizplus · Accepted Answer

Beta measures the sensitivity of a stock's return to the market return, while correlation measures the degree of association between two variables. Two stocks with the same beta may not have the same correlation because correlation is primarily influenced by the tightness of the relationship between the two variables, regardless of the magnitude of the change.

Two Stocks That Have the Same Beta ____ Have the Same