Question: Using the data in the following table, what is the covariance between the stocks of MicrosoftandGeneralMills? (Click on the following icon in order to copy
Using the data in the following table, what is the covariance between the stocks of MicrosoftandGeneralMills?
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in order to copy its contents into a spreadsheet.)
| Historical Annual Volatilities and Correlations for Selected Stocks (based on monthly returns, 1996-2017) | |||||||
| Microsoft | HP | Alaska Air | Southwest Airlines | Ford Motor | Kellogg | General Mills | |
| Volatility (Standard Deviation) | 0.32 | 0.36 | 0.36 | 0.31 | 0.47 | 0.19 | 0.17 |
| Correlation with | |||||||
| Microsoft | 1.00 | 0.40 | 0.18 | 0.22 | 0.27 | 0.04 | 0.10 |
| HP | 0.40 | 1.00 | 0.27 | 0.34 | 0.27 | 0.10 | 0.06 |
| Alaska Air | 0.18 | 0.27 | 1.00 | 0.40 | 0.15 | 0.15 | 0.20 |
| Southwest Airlines | 0.22 | 0.34 | 0.40 | 1.00 | 0.30 | 0.15 | 0.21 |
| Ford Motor | 0.27 | 0.27 | 0.15 | 0.30 | 1.00 | 0.17 | 0.08 |
| Kellogg | 0.04 | 0.10 | 0.15 | 0.15 | 0.17 | 1.00 | 0.55 |
| General Mills | 0.10 | 0.06 | 0.20 | 0.21 | 0.08 | 0.55 | 1.00 |
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