Q5: What is Covariance between variables (say return between stocks over time)? (Show equation) What does...

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Q5: What is Covariance between variables (say returnbetween stocks over time)? (Show equation) What does this measure?What if you had high, medium or low covariance between stockreturns? What does this tell you and what are the implications?Show Equation/Definition!!, answer all questions.

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Covariance between variables represent how both variables are related to each otherWhether they have position relation or negative relation Postitive covariance Variables are positively related Negative Covariance Variables are negative related See Answer

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Q5: What is Covariance between variables (say return between stocks over time)? (Show equation) What does...

70.2K

Verified Solution

Question

Finance

Q5: What is Covariance between variables (say returnbetween stocks over time)? (Show equation) What does this measure?What if you had high, medium or low covariance between stockreturns? What does this tell you and what are the implications?Show Equation/Definition!!, answer all questions.

Answer & Explanation Solved by verified expert

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