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 7 months ago

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