Question: Using the same stock return data from #5, use Excel to calculate the correlations of company pairs. What does correlation tell us about each of

Using the same stock return data from #5, use Excel to calculate the correlations of company pairs. What does correlation tell us about each of the pairs specifically and why is it important to know these correlations when creating portfolios? (Note: You are not required to use any calculations or answers from #5 to answer this question. However, you may use prior calculations if you think including them will help explain your answer, but it is not required.)

Stock	A	B	C
Year 1	10.00%	-5.00%	3%
Year 2	-15.00%	1.00%	5%
Year 3	35.00%	-4.00%	-7%
Year 4	10.00%	45.00%	-2%
Year 5	-20.00%	30.00%	5%

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