1 answer

Stock X Year Stock Y unanswered 8.00% -16.00% not_submitted 12.00% 2 -5.00% 14.00% 0.00% 4 4.00%...

Question:

Stock X Year Stock Y unanswered 8.00% -16.00% not_submitted 12.00% 2 -5.00% 14.00% 0.00% 4 4.00% 5.00% What is the covariance

Stock X Year Stock Y unanswered 8.00% -16.00% not_submitted 12.00% 2 -5.00% 14.00% 0.00% 4 4.00% 5.00% What is the covariance of the returns of Stock X with the returns of Stock Y? Submit Answer format: Number: Round to: 6 decimal places.

Answers

Stock X Stock Y
Year Stock X Stock Y Return - Average Return - Average Product of (Return - Average)Stock X*Stock Y
1 0.08 -0.16 0.0275 -0.1625 -0.00446875
2 -0.05 0.12 -0.1025 0.1175 -0.01204375
3 0.14 0 0.0875 -0.0025 -0.00021875
4 0.04 0.05 -0.0125 0.0475 -0.00059375
Average 0.0525 0.0025 SUM -0.01732500
The sum of the product of (Return - Average)StockX*StockY = -.017325
Covariance = -.017325/n-1
where n is the number of years
Covariance = -.017325/3
Covariance = -.005780
The covariance of the returns of stock X with the returns of stock Y = -.005780
.

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