If the correlation between two stocks is 1, the returns: generally move in the s

Question

If the correlation between two stocks is 1, the returns: generally move in the same direction. move perfectly opposite one another. are unrelated to one another as it is < 0. have standard deviations of equal size but opposite signs. None of the above. If the correlation between two stocks is 1, the returns: generally move in the same direction. move perfectly opposite one another. are unrelated to one another as it is < 0. have standard deviations of equal size but opposite signs. None of the above. generally move in the same direction. move perfectly opposite one another. are unrelated to one another as it is < 0. have standard deviations of equal size but opposite signs. None of the above.

Explanation / Answer

When correlation between two stocks is -1 , then the stocks are perfectly negative in correlation. So the return of the stocks will move in exactly opposite direction to each other.

so The correct option is :If the correlation between two stocks is 1, the returns:move perfectly opposite one another.

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