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Calculate the correlation of the two stocks below based on the scenario forecasts given: Probability Atlantis...

Calculate the correlation of the two stocks below based on the scenario forecasts given:

Probability Atlantis Co. Baltazaar Inc.
Boom 0.3            9 14%
Normal 0.6               13 4%
Bust 0.1 -10% -6%

Provide your answer in decimals, rounded to two decimals.

Solutions

Expert Solution

Solution :

The correlation between the stocks of Atlantis Co. and Baltazaar Inc. is = 0.44 (when rounded off to two decimals)

Please find the attached screenshots of the excel sheets containing the detailed calculation for the above solution.

jeff jeffy answered 1 year ago
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